The European Commission is to step in to curb supermarket power after alleging shoppers may be paying too much for their food while suppliers receive too little for their produce.

In a move seen as an attack on excessive market power exerted by Europe's supermarket chains, the Commission has unveiled an action plan.

A public-facing tool comparing consumer prices with input costs in EU countries has already been launched, while the EC has announced its intention to identify unfair contractual prices, increase awareness among suppliers of their rights, and help them report abuses. It is also mooting an EC-funded price-comparison service.

"Prices of food have remained rather high over the past year, while at the same time the prices of agricultural products were plummeting," its communication said. "Since 2007 the situation has worsened, because consumer prices appeared to increase when agricultural commodity prices increased but not to decrease as much when commodity prices decreased."

The Grocer has previously reported on retail prices rising while wholesale prices fell on UK cheese, rice, bread and pasta. The EC said rectifying problems in the food supply chain would result in better food at cheaper prices for shoppers, and give companies in the agricultural and food manufacturing sectors better growth, allowing more employment.

The NFU was quick to welcome the announcement. "This report echoes comments made by the NFU and the Competition Commission about the problems in the supply chain," said deputy president Meurig Raymond. "The recognition of the need to draw up EC measures seeking to ban unfair contractual practices is especially welcome. However, experience has shown that for measures like these to give real value and benefit to consumers and farmers there needs to be an independent ombudsman."

A Tesco spokesman said: "We have always worked hard to give shoppers great value while ensuring suppliers get a fair price. We've cut prices by at least £1bn in the last year as commodity prices have fallen."

Sainsbury's and Asda both refused to comment on the EC report, but the European Retail Round Table, which represents Asda, Tesco and M&S, warned a pricing tool might not show what share of retail price processors and other middlemen were ­collecting.

How The Grocer has tracked the issue:

Dairy investigation launched over new butter mountain (5/9/09)
Consumers left to foot £5.7bn bill for food price inflation (18/7/09)
Rice commodity cost falls 40%, but retail price lags far behind (23/5/09)
'Retailers profit while growers are crucified' (3/11/08)
Retail butter prices remain high despite wholesale price falls (25/10/09)
Supermarkets deny milking rising costs (5/7/09)