The NGO alliance “Initiative Konzernmacht beschränken” is calling on the German government and the Federal Cartel Office to take clear measures against the market power of food retailers. Rebalance Now is a member of the initiative and supports the statement at the end of the Green Week. The government factions must tighten up the Agricultural Organizations and Supply Chain Act (AgrarOLKG) in order to prevent unfair trading practices. The Federal Cartel Office should launch a sector inquiry into the food retail sector. The new structural remedies such as unbundling should also be considered.
The farmers’ protests show the difficult situation of agricultural businesses. One pressing problem is the high price pressure from food retailers. The sector is extremely concentrated: More than 85% of the market is accounted for by the four large supermarket chains Edeka, Rewe, Aldi and the Schwarz Group comprising Lidl and Kaufland. This concentration gives the supermarkets enormous market power, and it is the farmers who suffer.
The German government urgently needs to tighten the rules against unfair trade practices. We need a better Agricultural Organizations and Supply Chain Act with an ombudsman and price monitoring body, a general clause and an extensive ban on so-called grey trade practices. The buying power of supermarkets puts farmers under extreme pressure. They report that supermarkets are dictating prices. This hinders the necessary transformation in the agricultural sector, fair wages and investment in organic farming. Only a small proportion of the prices that customers pay at the supermarket checkout actually end up with the farmers – according to information from the German government, only around 14%.
In addition to the Federal Government, the Federal Cartel Office and the Monopolies Commission are also called upon. The statement calls on the Federal Cartel Office to conduct a sector inquiry into food retailing. The antitrust authority should make full use of its new powers to take remedial action. In addition to questions of contract design and trading practices, structural measures such as the splitting up of supermarket chains should also be considered. There are already indications that the Monopolies Commission will soon be looking at market concentration in the food retail sector. That is a good thing. It should also analyze how price pressure is passed on in the food supply chain.
Here is the statement “Price pressure from supermarkets endangers agriculture: Federal Cartel Office must take action against monopolization!” (pdf)
