Authors: Gudbrandsdottir, I.Y., Cook D., Olafsdottir G., Oddson G.,Stefansson H., McGarraghy, S. (2019). EU Conference on modelling for policy. Book of abstracts, p 109-111.
Unfair trading practices (UTP) within food supply chains are of increasing concern to European Union (EU) and member states’ policy makers (DG IPOL, 2015). Findings indicate that their negative impact on SMEs in the EU food sector is affecting the competitiveness of the industry as a whole (Wijnands et al., 2007). Although UTPs can arise in any market or sector of an economy, they have the potential to be especially problematic in food supply chains, as agricultural producers may be placed under undue pressure and have limited bargaining power in negotiations with larger purchasers, such as supermarkets or retailers, given the lack of alternative buyers (Duffy et al., 2003, Falkowski et al., 2017). As a counter measure, the recent EU Directive (2019/633) on UTPs aims at protecting weaker ‘suppliers’, primarily farmers, including their organisations (e.g. cooperatives) against their buyers, as well as suppliers of agrifood products which are further downstream (European Parliament, 2019). Due to the topicality and policy relevance of fairness in FVCs there is value in exploring its dynamics through simulation modeling.