Fight for fairness: Farmers suffer from pressure from retail chains!

Fight for fairness: Farmers suffer from pressure from retail chains!

Alarming conditions in the Austrian food market: The Fairness Office, which has been supporting farmers and food producers anonymously and free of charge since 2022, recorded more than 800 complaints about unfair trading practices in 2024. This number significantly exceeds that of 2023, underlining the urgency of the situation 5min.at reported. Federal Minister Norbert Totschnig described the Austrian food market as a “fight with unequal weapons,” as three large retail chains control around 90 percent of the market and put more than 100,000 farmers and processors under pressure. The documented abuses include a case in which a retail chain increased the price of a product by 30 percent while the producer received two percent less. Such cases particularly endanger small and medium-sized businesses, which suffer from rising personnel and energy costs.

The challenges for domestic producers are compounded by targeted markups on quality brands, while retail chains' own brands are offered at dumping prices. This means that consumers often turn to cheaper no-name products and the quality of traditional brands suffers. This information comes from the current report by the Fairness Office, which also points out the high and opaque costs that producers have to pay for imposed service providers. These financial burdens ultimately benefit consumers as retailers maximize margins. The fact that start-ups and young entrepreneurs are forced into dependence on large retail chains through exclusive supply contracts further exacerbates the situation. They are often required to make high investments without any guarantee of acceptance - a risk that is associated with high contractual penalties if the promised quantities cannot be delivered lko.at clear.

In order to remedy the grievances, the EU is planning a comprehensive evaluation of the guidelines on unfair trading practices by 2025. This measure is intended to ensure that producers receive fair incomes and are not exploited. The increasing number of complaints highlights the urgent need for action to ensure fair distribution in the food chain. The Fairness Office report not only highlights the current problems, but also highlights the growing awareness of fairness in the value chain. It remains to be seen what concrete steps retail chains will take to get these problems under control.