Mairead McGuinness Fine Gael MEP

Ireland East MEP, Mairead McGuinness has said that greater attention must be focused on measures to correct the flaws in the food supply chain, before seismic cracks emerge in the system.

Warning that it took the financial crisis for regulation of the financial services sector to be put in place, McGuinness said we cannot wait for a crisis in the food supply chain to kick start policy makers into action.

Speaking in Brussels following a meeting of the Working Group on Fair Play: Retailers and the Food Supply Chain, which she chairs, she welcomed ongoing work by the EU Commission to put in place a code of good practice to stamp out abuses in the food supply chain, whereby food producers face incredible pressures from retailers just to remain a supplier.

McGuinness said the Commission is continuing its work with stakeholders in the food supply chain to fight unfair practices. “This work must yield positive results. If not, then legislation will be needed to correct the problem,” she said. “Principles of good practice are important, but so too is enforcement.”

She went on to say that pressures in the food supply chain have intensified with the economic crisis.

She said Adrian Dally, head of policy with the UK Financial Ombudsman Service told MEPs in Brussels that there are significant lessons to be learned by the food supply chain from the regulation of the financial services sector.

“Food and Financial services are essential commodities for all consumers. There are risks associated with the food sector which is characterised by a small number of large players and regulation is required for both sectors.

“Mr Dally spoke about the importance of “nudging” better behaviour by transparency which has occurred in the financial services sector, where naming and shaming bad behaviour has brought about a change in behaviour.

“It is clear that the Ombudsman function has worked in the financial services sector because it is linked with a regulatory system.

“In the food sector there is no such regulation in place, suppliers are fearful of the unfair practices they face on a daily basis but are powerless to resist for fear of delisting,” she said.