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Abstract
Recent price movements have put food supply chains under pressure. On the one side, upward price tendencies on commodity
markets result in higher costs to processing firms. On the other side, these firms are confronted with a strong retail sector that is able to
prevent compensation to protect consumers’ and own economic interests. Regulatory impediments of European law, especially with respect
to foodstuffs, can adversely be utilized as barriers to protect the interest downstream the supply chain. The problem is that legal-economic
instruments which can serve to smooth price volatility in supply markets can also opportunistically be used at the expense of the middlesection
in food supply chains (i.e., mainly small and medium sized producers). The aim of this article is to identify the legal-economic
mechanisms that effect price transfers in food supply chains in the European Union and define policy adjustments to improve pricing
mechanisms, while safeguarding the interests of the processing industry. Policy alternatives to improve the smooth functioning of notably
intermediate markets in food supply chains are the restructuring of competition law, improved processor information management and
creating transparency of value added in the supply chain by means of labelling devices.