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`At last!'
Commission moves to
curb corporate retailers
Only time will really tell if the recent announcement by
the European Commission that it intends eliminating a
whole range of the most flagrant unfair practices rife in
the EU food supply chain represents a landmark. But one
thing is certain, the momentum that the Irish Creamery
Milk Suppliers Association (ICMSA) has previously noted
behind the move and to which we have done our best
to add is now reaching a critical level, and the retail
corporations that have effectively `run' the EU food supply
chain for decades must now realise that their dictatorship
is drawing to a finish. To paraphrase someone else
who was similarly cautious in proclaiming a victory, last
Thursday's announcement by the Commission that it was
banning a series of unfair practices that were endemic
throughout the supply chain certainly is not the end it
may not even be the beginning of the end but it is a
beginning. It's a first step, and it's a step that ICMSA has
been urging on the Commission for years.
The ICMSA tradition is to be properly critical where
we feel that is deserved but to acknowledge real work
and progress where that has been delivered, and that
is why we tip our hat here to European Commissioner
for Agriculture and Rural Development, Phil Hogan. My
attention was particularly drawn to the very first line of
his comments on the Commission banning, where he
said that "any chain is only as strong as its weakest link".
I reject the idea that farmers are, in any way, a `weak' link
but we are certainly the most commercially vulnerable
because we are the first link; we're there `right at the
beginning' of the chain and we have no-one behind us
to whom we can pass back losses or pressurise for extra
margin. Commissioner Hogan has recognised this, and
said as much at our 2015 AGM. But others have identified
the same problems without seeming to do much about
them; that is why we are happy to acknowledge that
this Commissioner, and this Commission, have finally
determined that the time for hinting and hoping has
passed, and we have finally arrived at the point where
reform must happen and the corporate retailers must
be confronted if any credibility is to be attached to the
Commission's authority over the EU food supply chain.
If the past record is any guide to what happens next, then
we can look forward to a storm of spin, emanating from
the lobbyists and PR agencies retained by the corporate
retailers, threatening food inflation and a rise in the prices
paid by consumers as the supermarkets' right to dictate
margins backwards and forwards is interfered with. We
can expect much `push-back' from the corporate retailers
and threats that these bans will result in consumer price
rises because the only way they (the retail corporations)
can guarantee excellent-quality cheap food is by being
permitted to price-squeeze their suppliers essentially
an abuse of their buying power over primary-producers.
We will all Commission, farm organisations, politicians
and indeed small-to-medium processors have to
stand together and not permit the multiples and retail
corporations to play us off against each other.
If we do that, I am confident that this will prove to be a
significant breakthrough. Nothing, they say, can stop an
idea whose time has come and ICMSA was particularly
glad to note the reports from France, where that Member
State, completely independent of the Commission,
announced that it, too, intends regulating margins in the
food supply chain, and actually in a more effective and
farmer-friendly way than the EU Commission seems
intent upon. A bill raising an existing threshold on so-
called `loss leaders' goes before the lower house of the
French parliament, the National Assembly, on May 22,
having begun scrutiny by the sustainable development
committee on March 27. The proposal would require food
and consumer goods prices to be at least 10 per cent over
the prices paid to suppliers the loss threshold.
ICMSA thinks that the French approach might be a more
effective tool to use on the corporate retailers, and we'd
like to see the Commission modelling its policy on this
tactic. But at least and at last the principle has been
established and we finally have some sign that the very
loaded dice with which we've all had to play for decades
is being removed from the board game.
MAY 2018
ICMSA
Pat McCormack
www.irishfarmersmonthly.com
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Pat McCormack,
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