Motion for a resolution - B7-0006/2012Motion for a resolution

MOTION FOR A RESOLUTION on the imbalances in the food distribution chain (2011/2904(RSP))


further to Questions for Oral Answer B7‑0021/2012, B7‑0675/2011 and B7‑0676/2011
pursuant to Rule 115(5) of the Rules of Procedure

Maria do Céu Patrão Neves, Albert Deß, Esther Herranz García on behalf of the PPE Group

See also joint motion for a resolution RC-B7-0006/2012

Procedure : 2011/2904(RSP)
Document stages in plenary
Document selected :  


European Parliament resolution on the imbalances in the food distribution chain (2011/2904(RSP))

The European Parliament,

–   having regard to its resolution of 8 July 2010 on ‘the future of the Common Agricultural Policy after 2013’[1], its resolution of 18 January 2011 on ‘the recognition of agriculture as a strategic sector in the context of food security’[2] and its resolution of 23 June 2011 on ‘the CAP towards 2020: Meeting the food, natural resources and territorial challenges’[3],

–   having regard to the Commission Communication entitled ‘Better functioning of the food supply chain in Europe’ (COM (2009) 0591) and the various working documents attached to this communication and also its resolution of 7 September 2010 on ‘Fair Income for Farmers: better functioning of the food supply chain in Europe’[4],

–   having regard to the Commission Decision of 30 July 2010 establishing the High Level Forum for a Better Functioning Food Supply Chain (2010/C 210/03),

–   having regard to the final recommendations of the High Level Group on the Competitiveness of the Agro-Food of 17 March 2009, and the conclusions of the Council of 29 March 2010 on a better functioning of the supply chain food in Europe,

–   having regard to its Declaration of 19 February 2008 on the need to investigate and correct the abuses of power by large supermarkets operating in the European Union[5] and its resolution of 26 March 2009 on ‘Food prices in Europe’[6],

–   having regard to Rules 115(5) and 110(2) of its Rules of Procedure,

A. whereas the Commission’s communication on a better functioning of the food supply chain (COM (2009) 0591) identified serious imbalances in the food distribution chain including: abuse of dominant purchasing power; unfair contract terms; late payments; unilateral contract modifications; restricted access to the market; lack of information on price formation; uneven distribution of profit margins throughout the food chain; and a number of problems associated with increased concentration in the retail sector;

B.  whereas the level of concentration of very large retailers in the European Union adversely affects producers and other suppliers because it results in growing imbalances of power between the contracting parties; whereas there is a progressive loss of bargaining power for agricultural producers and agri-industries against the power of these large groups in determining the price level along the value chain - from primary production, through processing to the final consumer;

C. whereas the increase in production costs and the impossibility of recuperating these costs along the food distribution chain may, in the short term, endanger the survival of agricultural holdings, thereby weakening the productive potential in Member States and exacerbating the problem of trade balances, import levels, volatility and dependence on external markets;

D. whereas competition authorities in a number of Member States have found that there are four key areas where the imbalances in the food supply chain are especially sensitive: the unilateral imposition of contractual terms; discounting practices; penalties; and payment terms;

E.  whereas the consumer is also negatively affected by such practices as low prices paid to producers and other suppliers do not result in lower prices for consumers and furthermore the large retailers use alternative products from third countries, which undercut prices to local producers, which means that consumers buy products produced to lesser standards - notably in terms of quality, food safety and respect for the labour standards, environment and animal welfare - than those demanded of EU producers;

1.  Emphasises that the problem of imbalances in the food distribution chain has a clear European dimension, which demands a specific European solution, given the strategic importance of the agri-food chain to the European Union; reminds that the food supply chain, agriculture, the agri-food industry and distribution represent 7% of the total employment in the EU and is worth €1400 billion per year - a figure greater than in any other manufacturing sector in the EU;

2.  Calls on the Commission to propose robust Community legislation - without distorting the proper functioning of the markets - to make fairer the relationships between producers, suppliers and distributors of food products, and to properly implement the rules already in force, not least because the latest agricultural income figures from Eurostat show that, since 2009, there has been a drop of 11.6% in farm income at EU level;

3.  Draws attention to work ongoing in the High Level Forum for a Better Functioning Food Supply Chain and its four expert platforms; regrets that the European Parliament is not formally involved in the work of the Forum and calls for this issue to be addressed as a matter of urgency to allow for the Parliament’s full participation;

4.  Insists that the Member States should play an active role in establishing consultation fora, with proper representation of the actors along the food chain, so as to promote dialogue and establish guidelines to bring about fairer, more balanced relationships; reminds that such official consultations contributes to protect the producers and suppliers and avoiding retaliatory measures from the distribution sector;

5.  Insists on the need to firstly agree upon a clear, rigorous and objective definition of abusive and unfair practices, including tighter definitions of concepts and clearer delimitation, so that they can be submitted to specific regulation, supervision and objective sanctions;

6.  Proposes the following as a non-exhaustive list of practices about which producers have raised concerns in relation to the functioning of the food supply chain:

I) Access to retailers:


      i) Advance payment for accessing negotiation

      ii) Listing fees

      iii) Entry fees

      iv) Shelf space pricing

      v) Imposition of promotions

      vi) Payment delays

      vii) Pricing

      viii) Most favoured client clause



II) Unfair contractual conditions or unilateral changes to contract terms:


      i) Unilateral and retrospective changes to contractual conditions

      ii) Unilateral breach of contract

      iii) Exclusivity clauses/fees

      iv) Imposition of a ‘forced’ contribution for private brands ‘Forced’

      v) Imposition of standard model contracts

      vi) Retaliatory practices

      vii) Non-written contractual agreements

      viii) Margin recovery

      ix) Over-riding discounts

      x) Payment delays

      xi) Imposition of payment for waste processing/removal

      xii) Group buying/joint negotiation

      xiii) inverted auctions

      xiv) Unrealistic delivery terms

      xv) Imposing the use of a (specific) package supplier or packaging material

      xvi) Imposition of the use of a (specific) logistic platform or operator

      xvii) Payment to cover (non previously-agreed) promotions

      xviii) Over-ordering of a product intended for promotion

      xix) Payment for not reaching certain sales levels

      xx) Imposition on suppliers of an extra discount for sales above a certain level

      xxi) Unilateral withdrawal of products from store shelves

      xxii) Imposing unconditional return of (unsold) merchandise

      xxiii) Imposition on suppliers of costs related to product shrinkage or theft

      xxiv) Imposition on suppliers for unreasonable costs related to customers complaints;


7.  Calls for the establishment of a framework to effectively control these practices, through administrative or judicial means, a system of evaluation and monitoring operated by the Member States and coordinated by the European Commission, with the establishment of dissuasive sanctions applied effectively and in due time;

8.  Calls, with regard to contractual conditions and abusive commercial practices, for a reinforcement of the means to ensure that payment deadlines are respected and, where necessary, new instruments should be put in place to minimize the length of time between the delivery and when the payment is actually received by suppliers; stresses, in this context, that solutions are urgently required to deal with the unacceptable problems encountered by producers of perishable products, with short shelf-lives, as these products are quickly sold in supermarkets yet producers only get paid several months later, leaving producers with major cash-flow problems;

9.  Notes the measures in the Commission’s draft proposals for the reform of the CAP, designed to strengthen the position of farmers in the food supply chain, through support for producer organisations and inter-branch organisations and by promoting short chains between producers and consumers, such as markets for local production; believes that strengthening farmers’ positions will help them to receive a fairer share of the added-value;

10. Points out that the purchasing of imports from other regions or countries of products that are locally available is sometimes done as a coercive action and demands that measures be put in place to prevent such ‘retaliatory’ imports, which cause, in the short term, the weakening of the national, regional and local agricultural suppliers, as these are small structures that cannot survive amid wildly fluctuation buying patterns;

11. Calls, with regard to the retailers’ own brands, for instruments and new regulation to be established to ensure that only separate legal entities are allowed to supply the retailer with the product that is to be sold under the retailer’s own brand name, even if the supplying entity belongs to the same commercial group; believes that retailers should not be in the position where they can benefit simultaneously from being both client and competitor of their suppliers;

12. Insists also that independent brands should be placed alongside retailers’ own brands on supermarket shelves so that the consumer is given as wide a choice as possible and rejects unfair in-store marketing practices which favour own brands against independent brands; calls for greater transparency and fairness in pricing practices for own and independent brands; insists that there must be rules in place to prevent parasite-style copying of independent brands by large retailers to create their own brands;

13. Calls for changes to existing EU competition law so that greater account is taken of the harmful effects of vertical concentration on the entire food supply chain, instead of a narrow focus on the relative positions of various companies on the market;

14. Calls for the implementation of the pilot project on the creation of a European farm prices and margins observatory, which, given the price volatility of recent years, will be an important tool for improving transparency in the food supply chain;

15. Calls on the Commission to better co-ordinate the work of its various services so as to be able to play a more effective role in price monitoring throughout the food chain and in monitoring retail dynamics and respective market shares throughout the EU; calls for the creation of an independent Food Trading Ombudsman to liaise with the relevant trade and competition authorities and with food trading national Ombudsmen in each Member State, in order to coordinate and share information; considers furthermore that the European Ombudsman and the different national Ombudsmen should be responsible for ensuring compliance with the relevant legislation in force and recommending timely and appropriate sanctions;

16. Insists on a system of sanctions to be applied where abuses are discovered which must be proportional to the financial and commercial damage caused to the food supply chain actors and must be administered swiftly enough to ensure that they are highly dissuasive.

17. Considers that the solution to tackling the imbalances in the food distribution chain consists of, a new framework combining regulation, changes to competition law and more horizontal legislation, in conjunction with existing and new, voluntary self-regulatory agreements; insists that member states should promote the development of best practices and/or codes of conduct in partnership with all stakeholders, integrating producers, industry, suppliers, retailers and consumer representatives, making the best use of existing synergies;

18. Believes that an EU-wide information campaign informing farmers of their contractual rights as well as of the most common illegal, unfair and abusive contractual and commercial practices should be prioritised;

19. Instructs its President to forward this resolution to the Council and the Commission.