Agri, Food & Retail

Agriculture

Agriculture, horticulture, fisheries and meat sector are, due to their importance for food supply, high on the agendas of politicians and competition authorities in the Netherlands and the European Union. This is amplified by the climate change and looming food crisis. These sectors are subject to specific European regulations that allow agriculturalists and fishermen to bundle production in producer organisations (POs). Farmers, agrarians and fishermen often set up cooperatives for this purpose, but even in times of crisis, they are still expected to observe the competition rules, especially in contacts with other POs, cooperatives, intermediaries or commercial traders. Politicians in the Netherlands and European Union have suggested to give farmers, agrarians and fishers more freedom to work together, but competition authorities are not exactly thrilled by the idea at the moment. The Wet oneerlijke handelspraktijken in de landbouw- en voedselvoorzieningsketen or Wet OHP (Unfair Commercial Practices in the Agriculture and Food Supply Chain Act – the “UCP Act) might be a probable solution. Although the Authority for Consumers & Markets does welcome sustainability initiatives (for environmental and animal welfare purposes) such as compliance marks and certification, the cartel prohibition (occasionally) still forms a barrier to launch these kind of initiatives. In order to better facilitate sustainability initiatives, the legislator is currently preparing an act to generally allow sustainability initiatives. The primary goal of the new act is to ensure that sustainability initiatives which are recognised by law will no longer fall within the scope of the competition rules. Furthermore, ACM has published the (draft) Leidraad Duurzaamheidsafspraken (Sustainability Guidelines) to enable more cooperation among competitors in the field of sustainability.

Food

Politicians and competition authorities are also keeping a close watch on the food sector with the aim of improving the operations of the European food chain. Studies are being conducted with this purpose in mind in various European countries. Branded products and private labels continue their struggle for retail shelves. The fight over shelve space in supermarkets frequently leads to conflicts between producers and retailers, which often involves the invocation of competition rules. Retailers should be aware of prohibited conduct (such as late payment) under the UCP Act. ACM can impose a fine or penalty payment for this behaviour.

Retail

The retail sector is moving fast, in both the food and non-food segment, largely as a result of the growing popularity of online sales. More and more producers and retail organisations are opting to sell their products through franchises, exclusive or selective distribution. That way they can retain some kind of grip on the positioning of their product. This regularly leads to proceedings with third parties about admission to the distribution network. Often (online) retailers are required to charge a fixed or minimum selling price (resale price maintenance). In the Netherlands, as in other European countries, competition authorities are increasingly imposing fines for resale price maintenance. Of course, producers will try to get their product on the best place on the shelves (category management). Retail organisations use contracts (sectoring, destination, exclusivity) to suppress competition in shopping centers or streets. This also culminates regularly in disputes with contracting parties and rival businesses. Internet sales continue to grow steeply which raises various questions: is it allowed to completely or partly block online resale via sales platforms such as Ebay and Amazon and is dual pricing allowed? ACM has made it clear that retailers must provide clear and accurate sustainability claims towards consumers.