EU hints at breaking retail oligopolies

Jean-Claude Juncker

Farmers have won backing from the very top in the EU for their calls to rein in retailers who are making life difficult for food producers.

“My impression is that we need to break some retail oligopolies,” said the script of Jean-Claude Juncker’s first ‘State of the Union’ address as European Commission President.

The remark didn’t eventually make it into his delivered speech.

Nevertheless, it is taken as confirmation that the major supermarket chain food retailers are targeted at the highest level in the EU, in the Commission’s work programme for 2016 and beyond. The barely concealed attack on the purchasing departments of the big retailers hinted at suspicion of conspiracy to keep the prices of agricultural goods low.

Referring to Europe’s farmers who protested in Brussels two days before his speech, Juncker said, “I agree with them that there is something wrong in a market when the price of a litre of milk is less than the price of a litre of water.

“But I do not believe that we can or should start micromanaging the milk market from Brussels.

“We should compensate the farmers who are suffering from the effects of sanctions against Russia. And this is why the Commission is putting a €500 million solidarity package for farmers on the table.”

“And European and national competition authorities should take a close look into the structure of the market.

“Something has turned sour in the milk market.”

The State of the Union speech requires the President of the Commission to take stock of the current situation of the EU and to set priorities for the work ahead.

As the first President of the Commission whose nomination and election is the direct result of the European Parliament elections in May 2014, Juncker said he will be a more political President.

And he reflected this in a passionate speech, saying Europe without farmers, agriculture, winemakers, and protection of the countryside would not be the Europe we live in today.

He listed Commission priorities as the refugee crisis; a new start for Greece, the euro area, and the European economy; a fair deal for Britain; support for Ukraine; and addressing climate change.

EU attention to retail reflected in his script is welcomed by the agricultural co-op sector, which recently said the huge power of retailers is hitting farmers hard, and EU measures were crucial to rebalance the food chain and to fight against unfair commercial practices.

Farmer organisations have made similar calls, with IFA President Eddie Downey recently saying the food chain is broken, and Europe must ban below-cost retail of food.

ICMSA President John Comer said food retail corporations protect their profit margins from market volatility while wiping out farmers’ income.


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