United States: 2014 Food Industry Outlook - EU Regulatory Issues

Last Updated: January 14 2014
Article by Matthew Hall

Unfair Trading Practices

During 2013, the European Commission (EC) carried out a consultation on the problems posed by unfair trading practices in business-to-business relationships along the food (and non-food) supply chain. A summary of the responses has been published. The EC also launched an impact assessment analyzing several possible options to address these issues, ranging from self-regulation to legislation. The EC is in the final stages of its analysis and the conclusions from this impact assessment are expected to be published in early 2014. Based on comments by EC officials, it appears likely that only the food sector will be covered and that the EC will seek to build upon the voluntary, private sector-led Supply Chain Initiative, which was launched on Sept. 16, 2013. A proposal to introduce legislation is not expected, in particular since European Parliament (EP) elections in May 2014 would delay implementation.

Choice and Innovation in the Food Sector

The antitrust directorate of the EC has been carrying out a study examining, in particular, whether increased concentration and the use of "own brand" (private label) products have hampered choice and innovation in the EU food sector by giving retailers bargaining power sufficient to impose unfair trading practices on their suppliers. The final report of the study is expected in early 2014.

The High Level Forum for a Better Functioning Food Supply Chain

The High Level Forum for a Better Functioning Food Supply Chain, comprising representatives of various stakeholders, has extended its mandate until the end of 2014. In addition to its existing projects such as helping to improve the European Food Prices Monitoring Tool, the forum is expected to focus on new issues, including food taxes and e-commerce. The forum is also going to be carrying out initial preparations for sector initiatives at Expo Milano 2015, the theme of which is "Feeding the Planet, Energy for Life." This is seen as a significant opportunity for the EU food industry.

New Rules Governing the Agri-Food Sector

On May 6, 2013, the EC proposed a "landmark package" that would update the rules governing the agri-food sector in the EU. The reform would cut almost 70 pieces of current legislation down to five and reduce the red-tape covering processes and procedures for farmers, breeders and food business operators (including producers, processors and distributors). Summarizing the proposal, the EC said that it would provide "smarter rules for safer food" in the EU. The main elements of the proposal can be divided into four sections, dealing with official controls, animal health, plant health and plant reproductive material. The legislation needs to be considered by the EP and the European Council. The EC estimates that, assuming the legislation is adopted, it will enter into force in 2016. The package is currently being considered within the committees of the EP, and EP votes on it are expected to take place in early 2014.

CAP Reform

The EU's Common Agricultural Policy (CAP) has been reformed and most of the new rules took effect on Jan. 1, 2014. The reforms (including those that will come into force in January 2015 or are subject to transitional rules during 2014) are intended to put more emphasis on environmental protection, ensure fairer distribution of EU funds and help farmers to cope better with market challenges. In particular, a new system of payments to farmers is being introduced.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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