Developments in food prices over the last years have caused the NMa, the European Commission and other national competition authorities within the European Competition Network (ECN) to look into the functioning of the food supply chain. This recently resulted in a report on ECN competition enforcement in the food sector which states that the Commission and the national competition authorities will continue to ensure the competitiveness of food markets. The NMa for one has kept its word so far: not only did it impose fines on 15 flour producers for cartel activities and performed market studies regarding pricing in the agro-food sector, the tomato market structure and the Dutch fisheries sector during the reporting period, it also recently imposed a total of EUR 23 million in fines on participants in two cartels in the agricultural sector.
It is no surprise that the food sector is still gaining a lot of attention: EU food prices have been increasing at all levels of the supply chain since 2007. Already in 2009 the Commission adopted a Communication aimed at improving the functioning of the food supply chain in the EU. In the same year, the NMa published its study on pricing "from farm to fork" in which it examined developments in the price of eight basic products in the food and agro-processing industry, i.e. potatoes, apples, bread, eggs, cucumbers, bell peppers, onions and chopped onions in the period 2005-2008. This study into the levels of retail prices, costs and margins along the food production chain concluded that supermarkets were unable to unilaterally raise their prices profitably at the expense of producers and consumers. However, the scrutiny of the food sector did not end there.
Earlier this year, a "Task Force Food" was established within DG Competition to keep an eye on the food sector for a period of two years. The European Commission finds most cases in the food sector to have a national dimension and considers them to be the main responsibility of the national competition authorities. A sector inquiry into this sector thus does not seem very likely in the very near future, although close attention is indeed paid to what is going on along the food value chain. A sector inquiry may even not be necessary given that the national competition authorities appear to be on the ball with over 180 antitrust investigations (with sanctions in respect of over 50 cartels), nearly 1,300 merger control proceedings and over 100 market monitoring actions since 2004. The NMa recently confirmed its active role in this sector by imposing fines totalling EUR 14 million on two cooperatives of bell pepper growers for price-fixing and five participants in a pearl onion cartel were fined for EUR 9 million in total. In addition, a fine of EUR 5,000 was imposed on a cartel facilitator. All in all, food sector participants should remain on the alert as the European Commission and the national competition authorities will continue watching their every move.