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AFCA’s market inquiry into food industry progressing

The Austrian Federal Competition Authority (AFCA) has been looking into the food industry market in great detail since October 2022. A final report is scheduled to be published in October 2023.

Since its inception in 2002, the AFCA has carried out several market inquiries. This one is the biggest inquiry we have undertaken so far. We have never examined such vast amounts of data before. However, this is necessary to gain a good overview of competition in the market and to be able to make informed recommendations,” explains interim Director General Natalie Harsdorf-Borsch.

The AFCA is focusing on the following four key questions from a competition perspective:

  1. Where in the supply chain (notably processing or retail) have the increases in food prices in 2022 primarily ended up?
  • Are certain commercial practices between suppliers and food retailers directly connected to these increases?
  • Have international food groups been able to profit to a disproportionately high extent?
  1. In which way has competition in the food sector changed over the last few years?
  2. How has product concentration developed within a wide range of product categories and what has happened to the market share of own brands?
  3. How does online retail, an increasingly significant factor, impact on competition within the food sector?

These key questions need to be answered to be able to see whether competition factors or competition shifts are responsible for the food price developments in evidence since the beginning of 2022.

Current stage of food sector inquiry – more than 2,200 companies surveyed

The AFCA has sent a total of 10 requests for information and questioned 700 trading firms as well as more than 1,500 suppliers.

The questions asked concerned sales figures, product ranges, market shares, pricing, commercial practices, own brands, costs and passing on of costs, entry barriers, price transparency and other factors, with a focus on 34 product groups (e.g. fresh milk, pasta, frozen pizza, bread and rolls, fresh meat etc.)

“With this in-depth evaluation, we want to find out whether specific competition issues have led to these price hikes. Prices have risen considerably across nearly all areas. We wanted to use our competition magnifying glass to find out whether food prices have been increased unfairly, for example because there was too little competition in specific product categories or because specific companies had too much bargaining power due to excessively high market concentration,” explains interim Director General Natalie Harsdorf-Borsch.

Frequently asked questions

To provide an overview of the inquiry, the AFCA is publishing an FAQ document on the food industry inquiry.

Next step in market inquiry: price comparison sites

Before publishing its final report, the AFCA will issue an interim report on online price comparison sites. In June 2023, the AFCA sent questions to seven of the more well-known price comparison sites in order to better understand how they work, how they collect data, how transparent they are in their dealings with consumers, and their factual and legal framework conditions. Five of these seven price comparison site providers have fully answered all the questions. The Austrian Retail Association has also submitted a statement. The interim report including relevant recommendations is due to be published in September.