fooddrinkeurope - la realidad europea

B2B Relations : Seeking

solutions at the European

Level

Roxane FELLER

Director Economic Affairs

FIAB - Seminario “La relaciones comerciales en la cadena agroalimentaria” - 8 March 2012

Outline

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1. Introduction : FoodDrinkEurope 2. The facts 3. The acknowledgement 4. The role of stakeholders

FIAB - Seminario “La relaciones comerciales en la

cadena agroalimentaria” - 8 March 2012

Introduction: FoodDrinkEurope

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FoodDrinkEurope

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■ National federations (26, including 3 observers)

- E.g.: FIAB (Spain), FDF (UK), ANIA (FR), BLL (DE), Federalimentare (IT), PFFI (PL), etc.

- Observers: Croatia (TUP), Norway (NHO),Turkey (TGDF)

■ EU level sector associations (25)

- E.g.: Breakfast cereals (CEEREAL), Chocolate, Biscuits and Confectionary (CAOBISCO), Spirit drinks (CEPS), Diary products (EDA), Snacks (ESA), Soft drinks (UNESDA), etc.

■ Large companies (18)

- E.g.: Barilla, Coca-Cola, Cargill, Danone, Heineken, Kellogg, Mars, Nestlé, PepsiCo, Ülker, Unilever, etc.

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Key Data on the EU food and drink industry



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Key competitiveness indicators

25/11/2011

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How can Europe’s food and drink industry improve its competitiveness?

A number of qualitative aspects impact on Europe’s food and drink industry competitiveness, these include:

I. The need for a more business-friendly EU regulatory environment

II. Fragmentation of the Internal Market

III. Unfair commercial practices along the food supply chain

IV. Rising input costs and security of supply in agricultural raw materials

V. An EU trade policy that supports EU food and drink exports

VI. The need for a holistic approach to EU policy-making aligned with international developments as appropriate

Improving the current level of competitveness

The facts

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FIAB - Seminario “La relaciones comerciales en la cadena

agroalimentaria” - 8 March 2012

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Bargaining power in the food supply chain

0,0 20,0 40,0 60,0 80,0 100,0

AUSTRIA

BELGIUM

BULGARIA

CZECH REPUBLIC

DENMARK

ESTONIA

FINLAND

FRANCE

GERMANY

GREECE

HUNGARY

IRELAND*

ITALY

NETHERLANDS

POLAND

PORTUGAL

ROMANIA

SLOVAKIA

SPAIN

SWEDEN

UK

Market shares of top 3 retailers, 2010 Source: Europanel 2010 and FoodDrinkEurope’s data 2011



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Private label penetration vs. market concentration, 2010



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Unfair commercial practices in the EU



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The objective

To seek general acceptance and acknowledgement that Unfair Commercial

Practices between partners in the food chain have negative impacts on

growth

To obtain a level playing field for commercial relations in the food supply

chain by avoiding the occurrence of the exploitative abuse of

economic/bargaining power

=

Eliminate unfair commercial practices in B2B relations in the food chain

The acknowledgement

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DG Enterprise 2008 - mid 2010 High Level Group for the competiveness of the Agro-food industry : “Recommendation 15”

Mid 2010 – end 2012 High Level Forum for a Better Functioning Food Supply chain: B2B Platform

Beyond 2012?



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DG Internal Market and Services (DG Markt) • Retail Market Monitoring Communication (2010) • Single Market Act (2011) • Survey to Member States (2011-2012) • Survey to Business Operators (European Test Business Panel) (2011-

2012)

Next steps: • End 2012 Communication outlining possible policy options for

remedies to combat unfair commercial practices (DG Markt)



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DG Justice

• New European Common Sales Law: Despite a first

indication that the scope of the draft legislation would be

restricted to B2C, the draft text also covers B2B relations

Annex I, Chapter 8 « Unfair contract terms » , Section 3:

« Unfair Contract terms in Contracts between traders” -

Article 86

• B2B Alternative Dispute Resolution (ADR) regulation (?)



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DG Competition

• European Competition Network (ECN) : Food&Retail subgroup

• ECN Investigation and ECN report to include a comprehensive

description of enforcement actions and market investigation in

the food sector over the least years

• January 2012 : Creation of a « Internal Task Force on Food »



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DG Agriculture

CAP Towards 2020 - Single CMO: Fostering cooperation =

allowing farmers to have a better position in the food supply

chain through mandatory recognition by Member States of :

• Producer Organisations (PO)

• Associations of POs

• Interbranch Organisations

Limited to the primary link of the food chain …..



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European Parliament

• 2010: José Bové Report on «Fair Revenues for Farmers »

• 2011: Corazza-Bildt Report on « Monitoring the retail

sector »

• 19 January 2012 Joint Resolution on « Imbalances in the

food distribution chain »



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European Economic and Social Committee

January 2011: « Retail market monitoring report ».

The Report notes that “manifestly unfair practices occur in in the

entire food supply chain” and call on the Commission to analyse

and address them appropriately.

The role of stakeholders

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Expert B2B Platform - 14.09.11

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PHASE 1

PRINCIPLES OF GOOD PRACTICE

Vertical Relationships in the Food Supply

Chain



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The Core multistakeholder dialogue group (CMDG)

• Created in March 2011 from the Core Group of the B2B Platform

• Mandate: by 14 September 2011, « to identify fair and unfair practices in a consensual way on the basis of concrete and relevant examples of factual practices occurring along the chain and possibly focussing on the most positive ones ».

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AIM (Brands)

CEJA (Young Farmers)

CELCAA (Traders)

CLITRAVI (Meat processors)

Copa Cogeca (Farmers and

Cooperatives)

ERRT (Large Retail)

EuroCommerce (Retail)

Euro Coop (Consumer cooperatives)

FoodDrinkEurope (Industry)

UEAPME (SMEs)

UGAL (Independent Retail)

CGMD Members

FIAB - Seminario “La relaciones comerciales en

la cadena agroalimentaria” - 8 March 2012

FIAB - Seminario “La relaciones comerciales en

la cadena agroalimentaria” - 8 March 2012

25

How we worked

• Association representatives • Common secretariat • Rotating chairmanship • External legal counsel • Work plan and methodology agreed early • As many as twice weekly plenaries • Small drafting groups when necessary



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Building trust

• Principles and examples expressed neutrally: no singling out of any sector / apply to all

• Consensus driven • No agreement until agreement on whole / The parts can’t

be separated • No external communication • Spirit of compromise in the room and in communication

to respective membership • Explain and justify • Commitment to the outcome

• Political context • Reasons for the multi-stakeholder dialogue • The framework and its objectives • ECR / Role of SMEs

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Structure of the document



Compliance with applicable laws, including competition law

3 General Principles: Consumers, Freedom of

Contract, Fair Dealing 7 Specific Principles: Written agreements,

Predictability, Compliance with agreements, Information exchange, Confidentiality, Responsibility for

risk, Justifiable request

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Ten Principles



• Agreements – written / unwritten • General terms and conditions • Termination • Contractual sanctions • Unilateral actions • Information • Listing fees (upfront access payments) • Threatening business disruption (unfair ex. only) • Tying • Delivery and reception of goods

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The examples



• The document was presented at the High Level Forum (HLF) of 29 November 2011

• It was warmly welcomed • The Stakeholders were given the madate to work on

Phase 2 : Implementation and Enforcement

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A successful Phase 1

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The press release

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PHASE 2

IMPLEMENTATION AND ENFORCEMENT

Vertical Relationships in the Food Supply

Chain

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The mandate

Mandate: by 30 June 2012 at the latest « to continue our dialogue in order to consider possible implementation and enforcement tools as well as the pros and cons of such tools with regard to effectiveness, costs, monitoring, transparency, credibility and any additional criteria that would be deemed of importance, with a view to agreeing on a preferred solution ».

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Progress report (15.02.2012)

• Secretariat • Chairmanship • No agreement until agreement on the whole package • Intensive meeting schedule in plenary and small drafting

groups as necessary • Phase 2 methodology agreed: - discuss objectives - define tools, scope, nature of commitments, expectations from public authorities

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Progress report (15.02.2012)

• The main agenda is to consider the areas that require consensus, e.g. from translation of the principles, awareness raising or training, via product scope and to the options for dispute resolution

• In line with Commission expectations, we are also considering what actions should be taken at company level, at national/EU association level, and whether action needs to be taken also by public authorities

• Our respective members are not in the room but part of the process throughout

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Next steps

• Meetings of Core Group Multistakeholders Dialogue • Progress report to the Commission B2B Platform + Sherpas • Interaction with other B2B Stakeholders

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! Muchas gracias por su atención !



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