EU guidelines on joint selling of olive oil, beef and arable crops

selling of olive oil, beef and arable crops

On November 27th new guidelines were published given in the European Commission for the sale of olive oil, beef and arable crops. These guidelines aim to support European farmers, specifying how, under certain conditions, to cooperate to jointly sell olive oil, beef and arable crops without falling foul of EU competition rules. As it was mentioned, the value of these markets is more than 80 billion euros per year.

Commissioner for agriculture and rural development, Phil Hogan, stated: “The guidelines are about strengthening farmers’ collective position in the food supply chain by setting out clear and practicable rules. They help farmers to counter-balance the effects of increasing concentration at the processing and retailing stages of the chain. This is an important step towards workable conditions of competition on agricultural markets and the full use of the available tools in the new CAP”.

Commissioner in charge of competition policy, Margrethe Vestager, mentioned: “These Guidelines are a manual explaining to farmers how to organise themselves in order to be able to jointly sell olive oil, beef and veal, and arable crops, while still fully respecting EU competition rules. The objective is to ensure that European farmers can work together to remain competitive and benefit from bargaining power towards the buyers”.

The EU’s standard competition rules ban agreements to set prices or other trading conditions or to share markets the agreements improve production or distribution while allowing consumers a fair share of the resulting benefit (Article 101 of the Treaty on the Functioning of the European Union).

These standard competition rules apply to the agricultural sector subject to certain specific derogations as set out in the Common Market Organisation Regulation (Regulation (EU) No. 1308/2013 – the “CMO Regulation”). These guidelines are about three efficiency-based derogations, which allow producers of olive oil, beef and arable crops to jointly sell and set prices, volumes or other trading terms of such products through recognised organisations, provided certain conditions are met (Articles 169, 170 and 171 of the CMO regulation).

Specifically:

  • these organisations must lead farmers to a significant performance improvement by providing support services, other than sales (for example, storage, transport or distribution) and
  • the volumes marketed by the organisations must not exceed certain thresholds (20% of the market for olive oil and 15% of the national market for beef and arable crops).

The new guidelines help farmers to comply with these requirements. It is also expected to help competition authorities and national judicial authorities in applying the new rules.

 

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