Agri fieldsThis brief EU Industrial policy overview for the Agri-food sector is an extract of the report published January 22, 2014. This staff working document illustrates trends and the impact of the crisis on production, investment, productivity, employment, skills and innovation. It also describes the EU performance in the international arena and considers possible benefits from improvements in the internal market regulations.

With an annual turnover over EUR 1 trillion and around 4 million employees, the agri- food industry is part of a complex supply chain, which encompasses also agriculture and distributive trade. Taken as a whole, this value chain generates a total value added of € 715 billion per year — almost 6% of the EU Gross Domestic Product. On average, 15% of household expenditure is on food and drink. The sector not only feeds people,it also responds to cultural, health, ethical demands and many other qualities that consumers demand from their food, including convenience.
Moreover, the EU is the world's biggest exporter and importer of agricultural and food products and accounts for about 19% of total global export flows.


The food sector legislation is highly harmonised in the European Union.
The sector enjoys significant benefits from the opportunities that the internal market offers.

Cross-border trade between the Member States has risen by 72% in value over the last decade (at constant geographic scope), and currently accounts for about 20% of EU food and beverage production. However, businesses still report market fragmentation and diverging implementation of EU law in some specific domains. Further integration of the internal market would open up new opportunities for growth.

Several Member States are developing national measures in non-harmonised areas, such as fiscal measures on food taxes, which may impact on the competitive position of the sector. At the same time, Member States initiatives to introduce public procurement rules fostering healthy and sustainable food choices may contribute to ensure more consumer-orientated food systems.

Generally speaking, the European food and drink market involves using and managing the EU's natural resources with impacts on consumer welfare, public health and the environment.
The economic crisis and consolidation in some parts of the value chain have contributed to change market power relationships over the past years. In the framework of the High Level Forum for a Better Functioning Food Supply Chain, European trade associations have agreed on the need to eliminate unfair behaviour. To this end, a self-regulatory initiative called 'The Supply Chain Initiative' was launched on 16 September 2013. Self-regulatory and regulatory initiatives are also developing at national level.

As a relatively labour-intensive industry, many companies in the food and beverages sector encounter difficulties in finding skilled workers that match their needs, especially in some subsectors.

While EU exports in foodstuffs are increasing in absolute terms, this is not the case of export shares and the EU agri-food sector's competitive leadership is increasingly being challenged by established trade partners (USA, Australia, New Zealand) and by emerging economies (Brazil, China). European high food safety standards continue providing a comparative advantage in exports markets. EU exports are high value added products while imports are mainly commodities.

Stakeholders report that the protection of intellectual property rights is becoming increasingly challenging as counterfeiting and illegal trade seem to increase, notably with regard to high value foodstuffs and beverages. If confirmed, such tendency could also harm the safety of products available on the market and harm the sector's image.


By the end 2014, the High Level Forum on a Better Functioning Food Supply Chain will report on its achievements. The Forum is expected to promote fairer business-to- business relationships within the sector and improve price transparency. It will also review the results of a study on food taxes and the relevant parts of the SME cumulative costs study.
By end 2013, the Regulatory Fitness check of the Food sector will be launched, supported by an evaluation of the general Food law. Results can be expected for 2015 of this comprehensive assessment exercise.

The Commission supports the Structured Social Dialogue Committee that was established in 2012 upon the request of the social partners.

To open new growth opportunities in non-EU markets, the Commission takes an ambitious approach in trade negotiations to improve market access in particular for processed agricultural products.
The Commission actively works with Member States and stakeholders to prepare its participation to the world exhibition EXPO Milano 2015 'Feeding the Planet. "Energy for Life". The event will offer a unique opportunity to showcase the high quality of European foodstuffs, to promote EU policies and in particular the industrial policy, including food crafts, and to improve the image of the agri-food sector as a whole. It should also contribute to develop synergies between the agri-food industry and other key economic sectors of the Union such as tourism or space.


State of the Industry, Sectoral overview and Implementation of the EU Industrial Policy (also attached here below)
Accompanying the document

Commission calls for immediate action for a European Industrial Renaissance
The European Commission is urging Member States to recognise the central importance of industry for creating jobs and growth, and of mainstreaming industry-related competitiveness concerns across all policy areas. This is the key message of the communication 'For a European Industrial Renaissance', adopted on 22 January 2014.
The Commission calls on the Council and the Parliament to adopt proposals on energy, transport, space and digital communications networks, as well as to implement and enforce legislation to complete the internal market. Furthermore, industrial modernisation must be pursued by investing in innovation, resource efficiency, new technologies, skills and access to finance, accelerated by the use of dedicated EU funds. The Communication promotes a more business-friendly Europe through actions to simplify the legislative framework and improve the efficiency of public administration at EU, national and regional levels. Other key issues include easier access to third country markets through harmonisation of international standards, open public procurement, patent protection and economic diplomacy.