The Congress of Deputies has approved the sale at a loss for all links of the agri-food chain. The agri-food sector is celebrating. However, the effectiveness of this reform remains to be seen. But, it is certainly a big step. Harder and firmer than Law 12 / 2013 and its subsequent modification in February 2020. We wanted to make a brief review of the problem of the agricultural sector in Spain. As well as the consequences that the oligopoly of department stores ... Keep reading!
What is selling at a loss?
La sale at a loss It is a commercial practice that consists of selling "X" product for a price lower than its cost. In most markets the goal of this practice is to eliminate competition and take over the market. Therefore, who executes it are the members of an oligopoly. The Agriculture, Fisheries and Food Commission of Congress has approved the reform of the Food Chain Law. The reform consists of the prohibition of selling at a loss in all links of the food chain.
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"In all links" includes the table final y the Horeca channel, (hotel and restaurant sector). The latter with certain conditions. However, the application of the obligations derived from the reform of the law will not apply until 2023 for this sector. It is crucial that all actors comply with the prices of the previous link. In this way it is possible to reach the last one: the farmers. And none of those who make up the food chain would be harmed.
The reform has gone ahead thanks to requests from different groups in the agri-food sector. Agricultural associations (ASAJA, COAG and UPA), representatives of the production (Cooperativas Agroalimentarias España), the industry (FIAB and PROMARCA) and the distribution (ASEDAS). In addition, the reform has allowed the adaptation of national legislation to the new European Directive. The latter related to unfair commercial practices in relations between companies in the food chain.
What does this new reform include?
In addition to the express prohibition of sale at a loss the new law includes certain conditions. First, the sale at a loss to the public of perishable food that is about to expire is not prohibited. Of course, provided that the consumer is informed of such circumstances. Second, joint offers of gifts to buyers may not be used in order to avoid law enforcement. These are two of the 40 amendments that have been approved, of the 300 presented.
Another important aspect is the contract price. It will be determined based on the evolution of the market situation, delivered volume, product quality y the effective cost of product production. We must highlight the consideration of the Canarian banana. Given the current situation on the island of La Palma de Mallorca This product is outside the sanctioning system to which it was exposed.
How has this situation been reached?
We are talking about a situation that takes years manifesting and developing. Explains Diego Juste, member of the Union of Small Farmers and Ranchers (UPA), en Agrodiffusion the origins are various. Mainly, the accumulation of a lot of power and few hands. That is, for more than a decade in the agri-food chain there are few actors who own the market. His power in the chain is too great. In turn, the production sector is a fragmented sector due to its family nature. For this reason, it is difficult for them to have great bargaining power.
Agricultural associations have been demonstrating for years to achieve really fair prices. Finally, the first step was Law 12/2013 on the Food Chain. However, the largest manifestation of the agri-food sector . in 2020 dazzled that it was insufficient. The one just approved a few days ago is of greater depth since it includes all the links. And, it also includes the Horeca channel. It was essential to impose norms that protected the most weak: the farmers.
🙌🏻 The new Food Chain Law responds to a historical demand from farmers and ranchers.
👉🏻 Selling at a loss is prohibited, thus guaranteeing a decent and fair income for the weakest link in the entire chain.@juanluissotoaddhttps://t.co/oTeclpOFhg
- PSRM - PSOE Region of Murcia (@PSOE_RM) October 4, 2021
The reform of the Food Chain Law was from Vital importance. Mainly because the agri-food sector has a great weight in the economy. They are the ones who produce the food, who basically sustain our food. Producers invest thousands of euros in more modern systems to increase their quality, labor and the most valuable: time and effort. It is not conceivable that in order to enrich themselves others they are not able to recover their money and amortize their productions. This law reform is step more hardener so far.
