EU to scrutinise competition in food retail sector

European Union regulators pledged on Wednesday to crack down on uncompetitive practices in the food retail sector.

 Warning of a risk that food retail
consolidation might be against consumer and producer interests, the
European Commission called for a case-by-case screening of a string
of retail practices that have the potential to be restrictive.

It warned that the size and number of
"buying alliances" in the food sector had grown
considerably throughout the EU, leading to the risk of obstructing
rivals' access to essential materials at competitive prices, it said
in a study.

"Cartels are hard-core
restrictions of competition. Recent experience shows that cartels can
occur in the food sector and that they are of varying territorial
scope," it said, adding that national authorities should target
cartels as a priority.

Besides, the size and number of such
alliances in the food sector had grown considerably across the EU's
27 countries and represented a real concern to food producers, the
paper said.

It called for closer scrutiny of a
string of practices such as joint purchasing agreements, which it
said could be efficient due to their economies of scale but could
also obstruct rivals' access to essential materials at competitive
prices.

Other practices singled out for
examination included single branding obligations, exclusive supply
arrangements and resale price maintenance — restriction of a buyer's
ability to determine the sale price to end-consumers — and deceptive
advertising, particularly on prices, the Commission said.

EU markets were fragmented due to
national differences in regulation that hampered its functioning, it
said, singling out rules on retail pricing, market entry and shop
opening hours.