The agri-food industrial ecosystem includes different actors in the food supply chain, such as farmers and fishers, the food and drink industry, food retail, and catering. The ecosystem is a significant part of the EU's economy. For example, the food and drink industry generates 4.6 million jobs and provides an added value of €227 billion. Small and medium-sized enterprises (SMEs) account for more than 99% of businesses in the ecosystem.
The EU Industrial Strategy highlights the need to accelerate the green and digital transitions of EU industry. As part of these programmes and initiatives, the Commission has proposed to co-create - together with industry, public authorities, social partners and other stakeholders - transition pathways for the different industrial ecosystems.
The Transition pathway for the agri-food industrial ecosystem was published on 11 March 2024. This document includes a set of actions to support the green and digital transition of the agri-food ecosystem, while also improving its resilience.
If you have any questions about this transition pathway, please email GROW-FOOD
ec [dot] europa [dot] eu (GROW-FOOD[at]ec[dot]europa[dot]eu)
Food and drink industry
The food and drink industry is the EU's biggest manufacturing sector in terms of jobs and value added. This is also an asset in trading with non-EU countries, as the EU has a food trade surplus. In the last 10 years, EU food and drink exports have doubled, reaching over €182 billion and contributing to a positive balance of almost €30 billion. Moreover, the sector benefits significantly from the opportunities offered by the EU Single Market, which captures 60% of the overall €513 billion in EU exports.
The European Commission works on improving the competitiveness of the EU food sector and the functioning of the Single Market for food. It also aims to create new trade opportunities for food and drink products through trade negotiations with third countries.
The European Commission is working to improve the competitiveness of the EU food sector and the functioning of the Single Market for Food (SMP Food). It also strives to create new trade opportunities for food and drink products, through various trade negotiations and dialogues with countries outside the EU.
Competitiveness
The EU food and drink industry is generally competitive on a global scale and produces high quality, healthy and safe food. Still, in recent years, the sector is facing a decrease in its relative competitiveness compared to other world food producers, mostly in terms of slower growth in labour productivity and added value. The inflation caused by high energy and fuel prices after the COVID-19 pandemic and the Russian invasion of Ukraine, has further increased the need for more competitiveness.
The European Commission therefore
- provides space for dialogue and exchanging good practices on sustainability along the food value chain through the Code of Conduct on Responsible Food Business and Marketing Practices
- works on skills development with the Large Scale Partnership for the Agri-food Ecosystem
- has measures in place to combat unfair trading practices among food operators
- monitors prices to increase market transparency
- supports small and medium-sized enterprises in innovating and expanding internationally through the Enterprise Europe Network (EEN), which has a dedicated Agri-food Sector Group
- helps cluster organisations, including agri-food clusters, across Europe and beyond to connect, communicate and collaborate through the European Cluster Collaboration Platform (ECCP)
- offers specific funding for small and medium-sized enterprises operating in the agri-food sector through its Single Market Programme (SMP)
- publishes studies to assess the competitiveness of the food and drink industry and other issues relevant to the sector
An important EU-wide initiative to support EU food competitiveness was the High-Level Forum for a Better Functioning Food Supply Chain. This Forum was active from 2010 to 2019 and engaged diverse stakeholders across the supply chain.
It focused on key issues such as competitiveness, innovation and sustainability. Thanks to the forum, many initiatives were developed, such as a voluntary code of conduct to address unfair trading practices, and a social dialogue committee for the food industry.
It also led to the creation of a list of barriers and solutions in the Single Market for food, and a harmonised approach for food product testing. More information about the Forum and its outcomes can be found in the 2014 and 2019 reports.
Trade in processed agricultural products (PAPs)
The Commission manages the trade regime for processed agricultural products (PAPs). It is working to improve the framework conditions for trade in PAPS by encouraging tariff dismantling and trade-friendly rules of origin. It also focuses is on standardising rules and the mutual recognition of food legislation with non-EU countries.
- What are processed agricultural products?
- Trade regime for PAPs
- Improving trade conditions
- Overview of the EU's food and drinks trade
- Bilateral and multilateral agreements with non-EU countries
DG Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) is responsible for all legislation on trade in PAPs.