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EuroCommerce: Consumers Shouldn't Pay To Line Multinationals’ Pockets

Published on Jun 23 2018 10:00 AM in Supply Chain tagged: Shareholders / EuroCommerce / Retail And Wholesale

EuroCommerce: Consumers Shouldn't Pay To Line Multinationals’ Pockets

Retail representative group EuroCommerce has responded to the draft European Parliament report on so-called Unfair Trading Practices in the food supply chain and has said that consumers should not have to pay to line multinational’s pockets.

EuroCommerce Director-General Christian Verschueren, commenting on the draft, said that retailers and wholesalers around Europe are shaking their heads at what the draft European Parliament report is demanding as changes to the Commission proposal.

“The Directive is meant to help farmers earn more, yet the latest changes risk offering highly profitable and very strong multinational corporations the ability to wring even more profits out of the European consumer, with no guarantee that these end up anywhere except their shareholders’ pockets.”

Profit Dominance

EuroCommerce highlighted that large multinational corporations hold more power than retailers or wholesalers, and make net profit margins of up to 30%, while retailers’ margins are no more than 1-3%.

Verschueren added that the proposal offered poor evidence of the problem and any real impact of such practices on farmers, nor that EU legislation would be better than the 20 national regulatory schemes already in place. The proposal would also increase the power of large cooperatives, while at the same time exempting them from paying farmers on time.

Some cooperatives control over 80% of any market, and operate across many territories.

‘This raises the question of who has real bargaining power, or has real choice,’ EuroCommerce said.

'Rigging The Market'

The body added that strengthening the negotiating might of large manufacturers can only result in retailers operating on very low margins who will not be able to absorb the resulting price rises - the consumer will have to pay, and farmers won't see any of the extra money, it added.

Verschueren asked, “Is rigging the market in favour of large manufacturers and cooperatives, who can themselves often be the source of farmers’ problems, the right road to go down?– it won’t help any farmer earn an extra cent, and only add millions of euros to the shopping bills of hard-pressed families across Europe.”

Last month, EuroCommerce said that a good mix of shops, offering a wide variety of goods and services, is central to keeping town centres good places to visit and enjoy.

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O'Sullivan. Click subscribe to sign up to ESM: European Supermarket Magazine.

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