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The Abuse of Supermarket Buyers – Power in the EU Food Sector

The Abuse of Supermarket Buyers – Power in the EU Food Sector

Preliminary Survey of Evidence

Publication

B. Young

1 March 2009

This document is intended to support the written declaration that was adopted by a majority of Members of the European Parliament (MEPs) on 19 February 2008, which requested the European Commission, particularly Directorate General Competition, to investigate and remedy “the abuse of power by large supermarkets operating in the European Union”. This request was based on concerns about abusive purchasing practices by large supermarkets, which were being raised in many EU member states. Due to the increased concentration of supermarket stores belonging to the same chain, the relationship between retailers and suppliers has changed. Since current laws prohibit abusive seller power by suppliers towards retailers, the changing bargaining power in the retail and food chain has resulted in abuses of buyer power. This abuse of ‘buyer power’ has been dealt with in different ways in many EU countries. Despite large supermarkets operating in different European Union (EU) member states and cross border trade being affected through their buying and selling activities across the EU, an EU-wide approach has been lacking to date. This could have important long term consumer effects, which are often overlooked in the current discussions, such as decreasing investments in innovation, less consumer choice and higher prices.