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Gourmet regulation

Douglas Fraser | 16:32 UK time, Wednesday, 28 October 2009

It's been a busy day in Brussels. Hebridean ferries have been given a clean bill of state-aid health. Northern Rock has been given the go-ahead for break-up.

The Scottish Power takeover by Iberdrola, and similar Spanish acquisitions of BAA and O2, have been found to have been based on corporate tax breaks which are now being banned.

That comes a bit late for those who fretted nearly three years ago about the loss of one of Scotland's big corporates to raiders from Madrid.

Then there's White Van Man, who is being told that his emissions are being brought into the same tight framework as passenger cars over the next seven years.

You can find a new strategy on advanced use of next-generation internet to control traffic congestion, manage energy demand and improve health care at a distance.

All significant in their own ways. But perhaps most significant is a move afoot by the European Commission to stick its regulatory nose into the food chain.

It has figured that the balance of market power is not properly calibrated.

Or to put it another way, big food processors and supermarkets have disproportionate power over the small producer and farmer.

Most notable among the little guys who have been hard-squeezed are dairy farmers.

They have a separate announcement today that they are being given the green light for governments to offer a one-off emergency 15,000 euro grant.

One solution being targeted for improving the operation of the food market is for EU members to have more transparent price information across retailers.

That's probably not something that will revolutionise food retailing in Britain, which is relatively efficient and competitive.

More relevant in the UK is the power of very few, very large supermarkets, which is more concentrated than you find elsewhere.

Of more relevance still might be the concern about prices going up, with market prices rising, but not coming down at the same pace.

That's a familiar argument to the one used against energy companies, having seen oil and gas prices spike over the past 18 months.

The European Commission wants to force more transparency into food pricing, so that consumers benefit from falling prices.

And that goes for more oversight of the food futures market to curtail speculative bubbles.

The politics has gone out of the economics of food, while food inflation has been relatively subdued.

But there are pressures growing from resurgent Asian economies and poor harvests, and Brussels commissioners are making preparations for the possibility - some might say the probability - that the acute pain of high and fast-rising prices could easily come back.

Comments

  • Comment number 1.

    Here`s a thought Douglas.

    If competition is such a good thing why is there only one Competition Commission and why is it based in Brussells? Why does one woman most of us have never heard of (Neelie Kroes) have so much power, especially when so few of us voted at all, let alone for Neelie?.

    Is it really too late to wake up before President Blair takes us into territory not seen since 1939?

  • Comment number 2.

    God help us if the EU gets to control food prices in supermarkets, we'll all probably be priced out of eating. As for energy prices, it seems almost all forms of energy are cheaper on the continental side of the channel than here. This is partly due to higher taxes and partly due to lower starting prices for the same commodities by companies trading on both sides of the channel.

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