The European Commission is launching a study to assess the impact of increased concentration and the use of Private Brand products on consumer choice and innovation in the European food sector. As a result, the Commission calls all expert researchers interested to submit proposals to its call for tenders by February 14, 2013. The final report of the study is expected by the end of 2013.
As Commission Vice President in charge of competition policy Joaquín Almunia stated: “Many stakeholders argue that European food markets do not work well, but we need more comprehensive data to assess these claims. 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.”
With the retail sector having become more concentrated over the last years, retailers have introduced their own successful brands thus, gaining growing bargaining power. Consequently food manufacturers and “national brands” claim that this concentration limits investment and variety in the food supply chain and make an attempt to examine these facts in order to find its potential harmful effects on consumers.
Currently, no comprehensive, contemporaneous data exists on choice and innovation in the food sector. The study will examine the market both in terms of choice and innovation and will also provide an analysis on the impact of unfair trading practices in the food supply chain.
This debate has happened numerous time throughout the years and it has almost always been instigated by the food manufacturers/national brands attempting to shift the balance of power. Make no mistake they are not trying to encourage innovation or choice they want more of their products on shelves. The phenomenon seems to be isolated to food and grocery – I have never heard a clothing manufacturer complain that H&M, Uniglo or Superdry are only selling their brand.