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May 23, 2019

EU proposes “price transparency” measures to end unfair trading practices

The European Commission is proposing new measures to increase "price transparency" in the food-supply chain. 

By Dean Best

The European Commission is proposing new measures to increase “price transparency” in the food-supply chain in its latest effort to promote fairer trading practices.

“Greater transparency can support better business decisions and improve trust in fair dealing between the stages in the food-supply chain,” the Commission said in a statement as it tabled a motion to make how prices are determined throughout the agri-food chain readily available to interested parties, with a key objective to strengthen the role of farmers.

“Having access to timely and easily accessible information about market developments is also key to compete effectively in global markets,” the statement read.

The proposals will cover meat, eggs, dairy, fruit and vegetables, arable crops, sugar and olive oil, with each EU member state responsible for the collection of price and market data. The measure is now open to a four-week public consultation period, and once agreed upon will be put into force within six months.

“They build on existing data collection systems and procedures that are already in place and used by operators and member states to report market information to the Commission, with a now wider scope,” according to the statement. “The Commission recommends that member states choose the most cost-effective approach and do not target small and medium-sized enterprises to reduce the administrative burden.”

Member states will collate the data and send it on to the Commission, which will put the information onto its agri-food database and market observatories. 

It’s the third measure initiated by the Commission to create a level playing field across the supply chain after banning unfair trading practices and improving cooperation among agri-food producers.

Phil Hogan, the EU Commissioner for agriculture and rural development, said: “Strengthening the position of farmers in the food-supply chain has been a priority for the Commission. Enhancing market transparency will allow equal access to, and greater clarity about price information, making our food chain fairer and better balanced. 

“These new rules will complement the recently-adopted directive banning unfair trading practices in empowering weaker and smaller actors of the food-supply chain, and their introduction reflects the very significant public support that there is throughout the EU to strengthen the role of farmers in the food-supply chain.”

Differences between buying and selling prices can provide information about intermediary costs such as transport, insurance and storage, and help parties make better business decisions, the Commission said. 

It said of the current unfair system. “This asymmetry of information between farmers and the other actors in the food-supply chain puts farmers at a significant disadvantage in the market and erodes trust in fair dealing. This lack of information on market developments from processors and retailers has been called the ‘black box’ of the agri-food supply chain and today’s proposal unlocks that box.”  

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