EC to ascertain whether own label stifles consumer choice
The European Commission is launching a study to assess the impact of recent developments in the Euro…The European Commission is launching a study to assess the impact of recent developments in the European retail sector on consumers.
Following calls by stakeholders, the Commission will examine, in particular, whether increased concentration and the use of own brand (private label) products have hampered choice and innovation in the European food sector.
The Commission has invited interested expert researchers to submit proposals to its call for tenders by 14 February 2013. The final report of the study is expected by the end of 2013. The Commission will evaluate the results and may put forward proposals to improve the functioning of European food markets.
"Many stakeholders argue that European food markets do not work well, but we need more comprehensive data to assess these claims,” said Commission vice president in charge of competition policy Joaquín Almunia.
“Therefore, we have decided to carry out a detailed study to find out whether European consumers enjoy sufficient choice and innovative products adapted to their needs when buying food. This will help us determine how to best solve these problems."
The retail sector has become more concentrated over the last years, according to the Commission, while in parallel, retailers have introduced their own brands, which are increasingly successful. This, says the Commission, has given retailers growing bargaining power vis-à-vis suppliers and may result in unfair trading practices, where individual suppliers are forced to accept unfavourable conditions for fear of losing a big – or sometimes even only – client.
The European Parliament, consumer organisations, national competition authorities and food producers claim that this limits investment and variety in the food supply chain, ultimately to the detriment of the final consumer.
As no comprehensive, contemporaneous data exists on choice and innovation in the food sector, the Commission decided to undertake an in-depth study, covering a wide range of products in several Member States over several years. The study will develop a methodology to quantify what the different actors in the food supply chain have delivered in terms of choice and innovation in recent years.
Regarding choice, the study will measure, for example, the variety of products available to consumer on supermarkets' shelves in their shopping area. To determine the level of innovation, the study will measure, for example, the offer of entirely new products (e.g. coffee capsules or allergen-free products in recent years) or of products with new ingredients or characteristics which allow a different use (e.g. instant-made products).
Moreover, the study will verify whether the significant levels of retail concentration reached in some local areas have led to a reduction of choice and innovation for consumers in those areas.
