Smith: Vital for markets to function well to prevent unfair practices

IT is important that markets function well and that unfair practices are prevented, Agriculture, Fisheries and Food Minister Brendan Smith said yesterday.

At a Council of Ministers meeting in Brussels, he said the Commission’s communication on a better functioning food supply chain in Europe was very timely. “It goes without saying, of course, that there must be fair play in trading conditions — including at retail level — and that action by the EU to ensure that this is the case is appropriate in the single market.”

Mr Smith said the Government is committed to implementing a national code of practice for doing business in the grocery goods sector in order to develop a fair trading relationship between retailers and suppliers.

A public consultation in relation to the introduction of the code of practice has taken place. The next step is to take on board observations received and to draft, initially on a voluntary basis, a code of practice. Subsequently this code will be put on a statutory footing.

“I believe that, while competition is vital, it cannot act as a sole mechanism to maintain efficient markets,” he said.

Mr Smith said the careful and sensitive use of market management measures can help to maintain balance on the market when appropriate. The use of such mechanisms can assist in the provision of fair returns to producers.

Mr Smith said the new Common Agricultural Policy must also address increased market volatility and the need for effective mechanisms to manage it.

He also called for greater price transparency leading to a better functioning food supply chain in Europe.

Noting that fluctuating currency conversion rates can complicate the picture, he said this should be taken into account in whatever systems are put in place at EU level.

He also said there a need to look critically at EU competition law, or its interpretation, and to audit unfair contractual practices

Mr Smith said he was very pleased the Spanish presidency of the EU had committed itself to progress the issue of improving the functioning of the food chain. Recent experience clearly shows there is a need for considerable improvement so that all players, including producers and consumers, receive fair treatment, he said.