Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-05-20-Speech-2-425"
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"en.20080520.29.2-425"2
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"The Commission is of course concerned about the recent wholesale and retail price increases in food and food products. This has implications for the people of Europe and, even more seriously, implications for billions of others around the world.
Indeed, EU food price inflation accelerated in the last quarter of 2007. The observed price increases at consumer level reflect recent developments in product value, cost and profit along the food supply chain. It should be noted that prices for major agricultural raw commodities had been rising for several months and continuously breaking record levels. That development mainly resulted from a combination of structural drivers: a steady rise in global food demand, the emergence of the biofuel market – only for a very small part – and more short-term factors such as adverse climate conditions, which provoked a decrease in the output volume of cereals in most of the EU Member States in 2007 and the restrictive export policy of some key world market suppliers and in general an increasing engagement of investment funds in agricultural commodity markets.
Nevertheless, it should be underlined that prices of raw materials do not constitute a strictly proportional part of food prices, especially as it becomes more processed. Thus some other components of the sale price, and I am thinking of energy and labour margins, have also influenced recent increases in food prices in the European Union. It must be noted that these price increases are not necessarily linked to a deficiency in the application of competition rules. As the honourable Member knows, the primary objective of EC competition policy is to make markets work better for the benefit of consumers in the EU.
As mentioned in several replies to recent parliamentary questions, the Commission, together with the national competition authorities forming the European Competition Network, monitors markets in order to prevent and sanction distortions of competition to the extent that these distortions can potentially harm consumers. The Commission only acts when it is better placed than national competition authorities to take action. They will act first, but when they are not in a position to do so, we will jump in. Indeed, since the issues related to the retail sector are frequently national in scope, the Member States are well placed to address them.
However, the Commission would like to reiterate that, should any specific breaches of competition rules be confirmed and supported by legal and economic evidence, we will not hesitate to take action. It is of course important to consider all relevant factors affecting these markets and the Commission will continue to monitor consumer prices, retail market concentration and any allegations of anti-competitive conduct. The Commission considers market monitoring to be a very important task. In the framework of the Single Market Review, the Commission will analyse the possible reasons for the malfunctioning of retail services, seen both from consumers’ and suppliers’ perspectives. The levels and differences of consumer prices between the Member States are also monitored in the annual report of the Consumer Markets Scoreboard. The first edition – as you are aware – of the Scoreboard was published at the beginning of 2008 and the exercise will be carried out yearly.
Prices are among the main screening indicators. Some price differences, especially in the case of non-tradable goods and services, may clearly be due to differences of income between the Member States. Nevertheless, particularly large differences between the Member States may suggest the need for further scrutiny. Additionally, the Commission will touch upon the issue of market power in the distribution sector in the framework of a High Level Group on the competitiveness of the agrifood industry. That initiative will be launched by the Commission in order to analyse the food industry, which in recent years has faced new risks and challenges which question the sector’s competitiveness.
The Commission will also in the weeks to come formally transmit a response to the European Parliament’s written declaration on investigating and remedying the abuse of power by large supermarkets in the EU. The Commission’s response will provide, among other aspects, certain clarifications in relation to buyer-power-related issues."@en1
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