Fairer, competitive food markets key to ending global hunger – UNCTAD
Fair and competitive food markets are crucial to achieving a world without hunger, a fundamental goal of the 2030 Sustainable Development.
The agrifood sector has seen rising market concentration in recent years. Through mergers and acquisitions, a handful of large multinational corporations have come to dominate global food value chains.
In the grains market, for example, the top four companies control between 70 to 90 per cent of global trade.
Similarly, in sectors like agrochemicals, animal pharmaceuticals, seeds, farm equipment and synthetic fertilizers, the four largest firms hold a combined market share that ranges from 33 per cent to 65 per cent.
Head of UN Trade and Development’s competition and consumer protection branch, Teresa Moreira, noted that competition can drive innovation and efficiency, benefiting everyone, says
Competition can also help reduce the costs of agricultural inputs like fertilizers and seeds, making food more affordable.
“When companies and farms compete, they strive to improve their techniques, resulting in higher quality products with more variety, sustainable practices, higher yields and lower costs that can increase aggregate surplus across each value chain,” Ms. Moreira said.
The UN agency further notes that competition law and policy can redress market power abuse and unfair trade practices.
In Austria, for example, the federal competition authority (AFCA) launched investigations into vertical price fixing in the food sector, where powerful retailers attempted to control resale prices, harming small and medium-sized producers.
Following around 50 unannounced inspections, known as “dawn raids”, the AFCA concluded 27 cases, resulting in nearly €70 million in fines. The authority also devised guidelines on resale price maintenance in 2022.
In Kenya, the competition authority (CAK) recently found that a large supermarket chain had abused its buyer power over suppliers, leading to fines and required amendments to contract clauses that facilitated such abuse.
