Are Producers' organizations and cooperatives companies or cartels?

Public consultation on Antitrust: Commission consults on draft guidelines on joint selling of olive oil, beef and veal livestock and arable crops


Open until 5 May 2015 but do not wait the last minut

The guidelines presented for public consultation are important. One of the interesting aspect is that Producers ‘organizations and cooperatives are not presented as a companies owned by the farmers but as cartels as “joint sale practices by the producers are caught by the prohibition of anticompetitive agreements set out in article 101(1) of the Treaty because it eliminates price competition between independent producers”.

Before it explains that “Both a PO and its members are therefore subject to competition rules… which applies to the decisions made /contact concluded by the PO”.

There are 2 different philosophies, with significant differences and consecuences:

1.    Producers ‘organizations and cooperatives are companies owned by the farmers. As such, they should not (as any company) abuse of a possible dominant position. If there is no abuse of dominant position by the company, the agreements between the producers and the POs (or cooperative) are their own business. For instance, the company can pay the same (or different) prices to the farmers, they can fix quality criteria even if the PO has a market share of 80%.

2.    Producers ‘organization (or the cooperative) is a cartel of producers. Therefore, it has to be investigated. In the example taken page 8 (point 19), the POs has a market share of only 8%. One can honestly ask how you can dream to rebalance the food chain with a PO which has a market share of only 8%.

The political choice between them has to be made explicitly. This is why this public consultation is so important.