Fair Markets Switzerland warns: Increasing market power in the food trade
A new report by the German Monopolies Commission lays bare just how much influence a small number of retail chains have on prices, producers, and consumers. In Switzerland, two major retailers dominate about 80 percent of the market—with even more serious consequences than in Germany.
The new Report of the German Monopolies Commission on the increasing market concentration in the food trade ruthlessly reveals the extent to which a small number of retail chains influence prices, producers and consumers. The fairness and transparency organization Fair Markets Switzerland sees a direct parallel to Switzerland in the developments highlighted there - albeit with even more serious structural consequences.
The German Monopolies Commission was commissioned in the course of the 2024 farmers' protests to investigate market power in the retail sector. A comparable independent body in this form does not exist in Switzerland, although protests here have also drawn attention to abuses in the value chains. Fair Markets Switzerland has been fulfilling this role for some time and has submitted several complaints and requests for investigations to the Competition Commission (ComCo) - but no concrete interventions have yet been made.
Market imbalances in Switzerland even more pronounced
The report from Germany states that large retail chains have systematically expanded their position vis-à-vis food producers. Agriculture is benefiting less and less from rising prices, while retail companies and some producers are expanding their position of power.
According to Fair Markets Switzerland, this assessment is particularly true for Switzerland. In Germany, according to the special report, four suppliers form an oligopoly in the food trade and share large parts of the market. In Switzerland, two major distributors, including their own significant industrial operations, dominate around 80 percent of the food market. The Swiss market is also more compartmentalized due to agricultural protection measures and has a smaller structure, which further increases the effect of concentration.
As a result, producers tend to receive less of the final retail price, small processors come under increased pressure and it is becoming less and less transparent for consumers how the price is made up. The recent discussion about the "rock-bottom prices" for 500 gram bread is a good example of the effects of structural market failure and abusive behavior, which undermines confidence in fair and functional pricing.
Sharper instruments and better structures needed
In its report, the Monopolies Commission calls for the remaining competition to be consistently protected. Fair Markets Switzerland also calls for market transparency and fair pricing.
According to Fair Markets Switzerland, the competition authorities need more effective instruments to be able to investigate highly concentrated sectors. At the same time, the almost 50,000 mostly small Swiss farmers must be given the opportunity to join forces effectively in order to build up real negotiating power vis-à-vis powerful buyers. Fair Markets Switzerland has developed political proposals launched.
Significantly more transparency along the entire value chain is also key. This is the only way to make the existing market imbalances visible. Only then can politicians and authorities react at all.
