Protecting producers - New controls for retailers

ONE of the relationships in this society that seems to be at least skewed, if not exploitative, is the one between large retailers and producers of all kinds.

Farmers have, for many years, protested over the pretty significant gap between farmgate prices and supermarket prices; they feel exploited by businesses so big that they can set take-it-or-leave-it prices, prices that often fall short of the cost of production despite significant subsidies.

They are not alone. Small to medium sized producers have been critical of the demands made by those controlling shelf space. They complain, often demanding confidentiality because of the power of mega retailers wield, that they are asked for hello money, and to bear the brunt of discounts and marketing costs incurred by supermarkets.

Some of these practices, close enough to blackmail in some instances, were outlawed yesterday when major changes to the rules regulating retailing were signed into law. Fines of up to €100,000 or two years in prison were provided for. Retailers may face further constraints this year as the European Commission is also examining business relationships in the food chain that may need further legislation.

In a world where commercial power becomes ever more concentrated; this legislation is necessary if small to medium sized businesses are not to be exploited by far bigger partners — but it will only work if it is vigorously enforced.