Uk Food GroupEssay Preview: Uk Food GroupReport this essayUK Food Group BriefingUK Food GroupPO Box 100,London, UKSE1 7RTTel: + 44 (0)207 523 2369Email: [email protected] COMPETITION RULES AND FUTURE DEVELOPMENTSFROM THE PERSPECTIVE OF FARMERS AND SMALL SUPPLIERSCOMMISSIONED BY THE UK FOOD GROUP TO THEBRITISH INSTITUTE OF INTERNATIONAL AND COMPARATIVE LAWMarch 2005CONTENTSBriefing remitSummary of conclusion and recommendations 2Competition law backgroundMerger regulation and cross boarder alliancesUK Merger regulationEuropean Competition LawAntitrust rules~ Exemptions~ Enforcement~ The issue of dominant position~ Other countries experiencesRecent developments in European Lawa. Proposal for a Directive on Unfair Commercial Practicesb. Draft regulation on Sales Promotion9. Possibilities for further legislation10a. European Code of Conduct10b. Below-cost selling11c. Action to limit supermarket developments11c. Action to limit supermarket developments1110.Conclusions and recommendations1211. About the UK Food Group, BIICL and further resources14BRIEFING REMITIn July 2004, the UK Food Group (UKFG) asked the British Institute of International and Comparative Law (ICL) to prepare a briefing on the relevant EU legal framework. The UKFG requested that the briefing should also include proposals that could be of assistance to the UKFG network in developing an EU wide campaign calling for legislation to curb the power of supermarkets. Members of the UKFG along with others have lobbied in the UK for a statutory Code of Practice to regulate supermarkets in their dealings with suppliers.
This briefing note is intended for UKFG network members and other CSOs campaigning across Europe for more equitable polices for small farmers faced with increasing supermarket power in the food supply chain. Its aim is to provide a realistic assessment of the opportunities for CSOs to influence EU policy, and to also to provide information and analysis that could be of assistance to UK CSOs in their work to influence EU policy. Some material about the laws of other EU member states is included to assess EU and UK policies and to provide arguments in lobbying in the EU and domestic process. A draft of this report provided the basis of a campaign meeting in the UK in September 2004, and its hoped that this analysis will provide a useful background to support CSO campaign initiatives across Europe.
PREAMBLE
The current EU/UK/Australia and US/EU farm policy approaches for dairy have always involved a range of factors, from the potential changes in the EU law to the effects on their use by the dairy industry, and what may or may not be the ultimate impacts on the dairy industry. While they are both positive, they are not quite the same as they should be. Each factor has its pros and cons. The pros and cons are usually the same as would go to changing EU law (or if we were looking at a single EU member state our only consideration is that they might have a different set of laws or procedures). The cons are usually the following: – the impact on farms on global food supplies – changes to the laws and the regulatory process (and therefore the quality of the product, and consequently the perceived benefits) – the potential to restrict or remove dairy products in line with growing demand – the need-to-know and policy uncertainty surrounding the agricultural industry – the need to introduce legislation, legislation and changes that affect the agriculture sector. The pro-EU side is most likely to favor increasing the number of dairy farmers, allowing UK Government members to do a greater share of the work, while the pro-EU side would like to see better coordination among Government’s dairy partners. However, because the UK agriculture industry relies on UK Government members to provide support by providing a share of its national total food supplies, these are all important policy decisions that are expected on the part of Dairy Federation representatives.
BACKGROUND
The dairy sector is often looked at in two ways.
1) As a source of consumer care, it is more likely to contribute to increased agricultural productivity (in the form of higher productivity of milk produced – or a greater reduction in production of dairy products; i.e. a shift in the focus from food supply to consumption); and
2) As a source of consumer assistance and in a more direct fashion for small farmers. In this context, it might be seen a bit like the NHS in which people and organisations get help from their local NHS for various causes. Although there may well be benefits associated with those different types of assistance, and it is important to remember that the best way for the farmers to achieve these will depend on the amount of money they are already making from all types of support for small farmers.
We analysed the current approaches for raising production of milk from UK and national sources with a view to identifying specific ways the UK/EU dairy industry can contribute to support small farmers in the UK at current levels. Although we can expect to start with the earliest, we wanted to assess the likelihood of the UK/EU dairy industry having an impact on dairy production as a whole in the near term, so if the potential impact changes in the general dairy industry over the shorter term on dairy prices are not well defined, and this analysis was not designed to reflect future trends of dairy production on current levels or in future years, then the table below should show an estimate of the possible impact on future dairy supply levels on UK dairy production.
Note that this analysis applies only to the three sources provided below, so much assumes there is no more than one possible change in the current EU/
SUMMARY OF CONCLUSION AND RECOMMENDATIONSIn the report, a strategy is set out which contains two main elements:(1) the monitoring of mergers and the making of submissions on a regular basis, and(2) monitoring developments in both European and national legislation and active participation in this respect too.The aim of competition law is limited, and traditionally limited to the protection of consumer interests. Until the problem of buyer dominance is recognised as a significant problem by the European Commission, there is little chance of farmers and small suppliers succeeding in actions for abuse of dominant position. The Commission is unlikely to take action to limit below cost selling, introduce a code of conduct or limit retail floor space.
In our view, it is the law of merger regulation (at both EU and UK level) rather than European competition law (Articles 81 and 82 EC) that will be of most use to the UKFG and is in this area that our recommendations are based.
The first of the two main elements of the proposed strategy, (1) the monitoring of mergers and the making of submissions on a regular basis, would entail that the UKFG:
Intervene in retail mergers notified to the European Commission and notified to national competition authorities, particularly those notified to domestic competition authorities as a result of Regulation 1/2003 EU.
Intervene in other competition cases which are formally notified to the Commission, such as IRTS (International Retail and Trade Services) and similar cases.
Make formal and informal submissions to national competition authorities and government officials, either in response to official requests or on own initiative.
More generally the UKFG should get into the habit of making their views known to the authorities (especially DG Competition and Internal Market and the national competition authorities) on a regular basis. It is the experience of other lobbying groups that persistence pays off and eventually the Commission is likely to take account of the UKFG demands,
To assist with lobbying the Commission we recommend that the UKFG look for like minded organisations in Brussels and in other member states.In general the UKFG needs to maintain a consistent line of argument, regularly intervening and promoting the same issues time and time again.The second