Competition enforcement in the food sectorTuesday, 29 May 2012
The European Competition Network (‘ECN’) has published a report concerning competition law enforcement and market monitoring activities in the food sector by the European Commission (‘Commission’) and national competition authorities of the 27 member states of the EU (together ‘European competition authorities’). The report shows that the food sector has been a priority for European competition authorities over the last few years. The actions of the European competition authorities have intensified since 2007, during the food price crisis.
ECN and the grounds for the report
The ECN consists of the European Commission and the European competition authorities. It was established during the modernisation reform of the EU antitrust rules as a forum for discussion and cooperation of national competition authorities in antitrust cases. The report of the ECN responds to requests by members of the European Parliament for explanations about the actions taken by several competition authorities in the food sector and ultimately to the Commission's communication of 28 October 2009 on a better functioning food supply chain. This communication called for a common approach among competition authorities within the ECN to better detect endemic problems specific to food markets and promptly coordinate future actions.
Highlights of the report
The report provides detailed information and findings on how competition works in the food sector on the basis of the most recent activities carried out by the European competition authorities in this sector.
Since 2004 European competition authorities have started more than 180 antitrust investigations in the food sector. 120 of these investigations resulted in a finding of an infringement. The European competition authorities are still investigating about 60 cases. The antitrust investigations cover a wide range of food markets. Most cases were started in the field of multi-products (21% of all cases) and cereals and cereal-based products (18%), followed by milk and dairy (12%). About half of the total number of antitrust investigations concerned cartel infringements.
In addition the European competition authorities have analysed almost 1300 mergers in the food sector since 2004. A merger needs to be notified to a competition authority if certain (national) turnover and/or market share thresholds are exceeded. Each member state of the EU has its own national merger control rules. The report also shows that European competition authorities have carried out 103 market monitoring actions, of which 10 are on-going. Market monitoring actions are used to improve the knowledge of competition authorities of sectors and ensure that markets remain competitive. The scope and focus of these actions varies. The largest number of monitoring actions has focused on the retail sector (36 in total). 9 monitoring actions concern the food supply chain and agro-food sector as a whole. There are also monitoring actions that focus on specific products such as milk and dairy (16 monitoring actions), fruit and vegetables (10) and cereals and cereal-based products (9).
Conclusion of the report
The ECN comes in the report to the conclusion that European competition authorities have actively applied competition law in the food sector. The many monitoring actions and enforcement actions show that the food sector has been a high priority for competition authorities. As food prices are expected to continue to rise, the European competition authorities will continue to act to ensure that food markets remain competitive.