Germany’s Habeck wants market power of food industry scrutinised

As nationwide farmers’ protests continue, the German government wants to have the market power of supermarkets and the food industry scrutinised, blaming their price-setting power for the poor economic situation of many farms.

Read the original German article here.

Planned subsidy cuts for agricultural vehicles and fuel triggered nationwide protests in December and January. Whilst the federal government remains committed to phasing out subsidies for agricultural fuel, it is trying to find other ways to improve the economic situation of the farmers.

“We have asked the Monopolies Commission to examine the structures of the market,” Economy Minister Robert Habeck (Greens) said during a visit to the “Grüne Woche” agricultural trade exhibition in Berlin on Wednesday (24 January).

The Monopolies Commission is an advisory body consisting of economists, entrepreneurs and legal experts. It advises the government and competition authorities on issues relating to the proper functioning of competition.

A functioning market would create favourable prices for consumers, while at the same time creating fair conditions for all market players, according to the German Economy Minister. “And that is why the Monopolies Commission is asked: Are the market conditions fair for everyone, particularly for farmers in this case?” Habeck said.

“If it turns out that they can be made fairer, that would also be a contribution to the debate to then ensure in the laws or regulations, or at the European level, that farmers can also pass on their production costs as prices on the market in a more self-determined way,” he added.

Marc Bataille, Secretary General of the Monopolies Commission, confirmed to Euractiv the Economy Ministry’s request for an investigation of the food industry.

The Monopolies Commission plans its first analysis, or “policy brief”, in the coming weeks to assess possible legal steps. A more detailed report on the topic is also to be prepared by the end of the German legislative period in autumn 2025, if possible.

However, competition economist Justus Haucap, former chairman of the Monopolies Commission, told Euractiv that the discussion on the market power of the food industry was an “obvious distraction” by politicians.

He pointed out that a large proportion of food is exported, meaning that prices are not solely determined between German farmers and customers.

Farmers' protests: German Greens put blame on supermarket chains

As farmers continue to stage huge traffic-blocking protests across Germany, a growing number of voices within the ruling Greens are blaming major supermarket chains’ pricing policies for many farms’ currently dire economic situation.

Agriculture minister wants to use special rules

In addition to traditional competition law, such as the prevention of price fixing and the formation of cartels, other rules in the food sector are already specifically designed to ensure market fairness for farmers.

These include the EU’s Common Market Organisation, which offers a wide range of opportunities for market intervention, as well as a ban on “unfair” trading practices such as short-term cancellations.

German Agriculture Minister Cem Özdemir (Greens) announced that these special rules are to be used to a greater extent in the future to support farmers.

At the Grüne Woche, he thanked Habeck “because it naturally helps us a lot that the Federal Minister for Economic Affairs is prioritising this issue”.

“We have also had discussions with the milk producers,” Özdemir added. “Now the respective implementation is coming […], where we want to ensure that milk producers know the price in advance.”

To achieve this, the government wants the article 148 of the EU’s Common Market Organisation regulation. This would allow the government to determine that all contracts must be in written form and must “include provisions particularly on price, quantity and duration”, as the trade association MEG Milch Board states.

“None of us will agree to a job where we don’t know how much we will earn in the end,” Özdemir said at the agricultural trade fair.

“But it is supposed to be normal for milk producers to provide milk without knowing how much money they will receive in return,” he continued, announcing that he would “finally tackle this issue now”.

Germany changes budget deal after farmers’ protests, cuts marine fund

In a bid to soothe farmers protests, the German government has announced changes to its hard-won budget compromise, which will see some subsidies for farmers kept and a fund for marine protection slashed.

“Ineffective” due to exemptions

However, Frank Lenz, Chairman of the MEG Milch Board, has already warned that a large proportion of milk would not be affected due to exemptions for cooperatives.

“The introduction of mandatory contracts containing specific volumes, prices, qualities and terms, which would only apply to private dairies, would be ineffective, if around 70% of processed milk were not affected,” he stated in a press release.

“A cooperative supply arrangement with retrospective price fixing is not a milk purchase contract with an agreed price,” Lenz said.

Peter Mandelfeld, spokesperson for the cooperative dairy industry interest group (IGM), however, welcomed the exception.

“The representatives of the cooperatives and members of IGM have […] made it clear that they strictly reject external interference in farmers’ self-administration in the dairy cooperatives,” Mandelfeld said in September last year.

As farmer protests continue, EU Commission's dialogue slammed as 'too late'

With the European Commission’s ‘strategic dialogue’ between policymakers, farmers and agriculture stakeholders due to start on Thursday (25 January), agriculture ministers on Tuesday said the initiative is coming too late.

[Edited by Nathalie Weatherald]

Read more with Euractiv

Von der Leyen kickstarts strategic dialogue on future of EU food systems

With tractors continuing to parade through the streets of Europe, on Thursday (25 January) European Commission President Ursula von der Leyen met with food chain stakeholders and NGOs to launch a ‘strategic dialogue’ between agriculture groups and EU decision-makers.