ICSA president Dermot Kelleher has said the EU CbCR Directive (Country by Country Reporting Directive EU 2021/2101) has the potential to deliver real transparency around who is making what margins along the food chain and expose excess profiteering. Speaking at the ICSA AGM last week, Mr Kelleher told the meeting that ICSA has recently had discussions with Commissioner Mairead McGuinness about the Directive. “This Directive is a welcome move by the EU to bring more transparency to the operations of key large-scale operators in the food chain, but it is vital that no leeway is allowed to dodge its provisions,” he said.
The Directive (referred to as the CbCR Directive) requires that any multinational company with global revenues exceeding EUR 750 million, whether established in the EU or not, should report on its operations in each of the Member States, as soon as they are doing significant business in the EU, whether through limited or unlimited undertakings. The reports will disclose for each country the nature of activities, a list of the group’s subsidiaries, turnover, number of employees, retained earnings, profit before tax and corporate taxes paid.
The critical feature of this Directive is that it does not allow private unlimited companies to continue to operate behind a veil of secrecy as currently applies. “Companies such as certain meat processors avoid having to file detailed returns to the Companies Office, because of their unlimited status. This is making the task of understanding who gets what in the food chain very complex and challenging. We don’t have transparency over where the profits from beef go for example.
We welcome this Directive and want to see it deliver real transparency around the profits in the processing and retailing sector, and we expect that EU member states will work to deliver its potential.”
The Directive must be transposed into Irish law by June 2023. “It is critical that this Directive is implemented in full and in keeping with the spirit of what is intended. ICSA is concerned that there has been lobbying to water it down in Ireland and the Government must resist this.”
“ICSA wants to see the Food Regulator appointed without any more delay and we want the Government to fully support the need for fairness in the food chain and transparency over who makes what. The EU Directive, if properly implemented, will certainly provide assistance to the new Food Regulator so it is vital that the Government commits to a full implementation that delivers transparency.”
“ICSA originally brought the issue of fairness in the food chain and transparency to EU Commissioner Phil Hogan in 2014. This CbCR Directive along with the UTP Directive (Unfair Trading Practices) certainly have the potential to deliver but it will hinge on the determination of member state governments to deliver the transparency and fairness. For too long, farmers have been badly treated in the food chain and have seen their margins decimated. It is time now to put pressure on retailers and processors to treat farmers fairly and the first step is to shine a light on who makes money out of farm products like meat, dairy, and vegetables.”