Food supply chain under scrutiny

In stores large and small, far and wide, ask shoppers the same question about feeding their families and you get largely similar answers:

“I don’t think there’s been a drop in food prices, in spite of a plunge in agricultural commodity prices. As a consumer, I haven’t noticed a significant fall for dairy or cereal products, for instance — certainly not!”

“Has there been a drop in food prices? I don’t think so. I find everything’s going up!”

The European Commission has proposed steps to rebalance Europe’s food supply chain. This includes taking a closer look at certain operators’ profit margins, which have, in some cases, penalised both households and producers. Brussels wants to identify unfair contractual practices where one side has taken advantage of much stronger bargaining power.

The farmers’ protests of the past year make clear their anger at being left at the mercy of liberalised market rules. With national authorities, the Commission aims to tighten controls to defend valuable and vulnerable players in the supply chain.

Yet a senior voice within Belgium’s federation of distributors rules out generalised foul play: “When the agricultural commodity price falls, the farmer gets less in hand. How is it that the prices don’t fall as strongly for the consumer? In the stores? Simply because the agricultural price is only a very small part of what the consumer is paying.”

To boost transparency, the Commission has launched a price monitoring service it aims to broaden online, as huge price variations for the same product exist from one EU state to another.

The farming, processing and distribution sectors all have a direct impact on ordinary Europeans. Brussels calculates that food represents on average 16 percent of household spending.

Copyright © 2009 euronews

tags: Europe, Food, Inflation