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New Ombudsman should address the unfair distribution of margin within the food supply chain

ICOS has made a submission to the DAFM public consultation on the role of the new National Food Ombudsman and expansion of the scope of the EU Unfair Trading Practices (UTP) Directive.

We have highlighted a number of critical elements to be considered for the proper and effective functioning of the new legislation and office.

The Role of the new National Food Ombudsman:

  • In addition to acting as the enforcement authority for the UTP legislation, the Ombudsman will have a role in analysing and reporting on price and market information. ICOS believes that enabling greater market transparency could particularly help address the regulatory dysfunction and problematic market dynamics within the liquid milk sector. However, we outline in our submission that all data on price must be aggregated, analysed and published in such a way so as to protect the position of suppliers and to demonstrate market functioning (or dysfunction) and the economic sustainability of different actors in the chain. We therefore believe that collection and publication of information on the distribution of margin across the food supply chain should be a key focus for the new office.
  • We support the Ombudsman being empowered to act with authority, and able to show a strong signal to those in breach of the legislation. We have therefore called for the Ombudsman to have the power to provide dispute resolution and impose fines where necessary, outside the court system.
  • The Ombudsman should also have a role in communicating with consumers on the economic sustainability implications of low-cost food and pricing, which is below cost of production for farmers and local production. Additionally, the office should have a role in proactively promoting good conduct, fair trading and fair pricing amongst retailers.

Expanding the scope of new UTP Legislation:

  • ICOS believes that all suppliers should be protected under the new legislation, irrespective of their size. Currently the legislation is limited to regulating relations between SME suppliers and buyers which are larger than them, meaning the majority of the dairy production pool falls outside of the scope of the legislation.

Clarification on the implementation of the Legislation in relation to Dairy Co-operatives:

  • In order to protect the proper functioning of farmer owned dairy co-operatives, the role of democratically elected supplier representatives must be recognised, for example with regard to their role in setting monthly milk price and agreeing to certain changes on quality standards.
  • Equally the clarification provided by the European Commission to the DAFM and ICOS that delivery periods of more than 30 days will continue to be possible and not at risk from the legislation, must be noted, to accommodate for the continuation of five-week delivery periods operated by certain dairy co-operatives.

Alison Graham – European Affairs Executive