Competition law fears deterring collaboration to improve food supply chain sustainability

Fears surrounding competition laws are deterring businesses from working together to promote sustainability in supply chains, according to a new report.

Research conducted by the Fairtrade Foundation revealed cooperation between companies could benefit consumer choice and value, by improving quality, security of supply as well as bringing social and environmental advantages to the producers and farmers who grow the food we eat.

Businesses are often wary of working with rivals to strengthen supply chains as they fear falling foul of competition law.

At the same time producers and farmers are facing an increasingly uncertain future caused by fluctuating prices and climate change.

The Foundation wants the government and Competition and Markets Authority (CMA) to do more to encourage private sector companies to work together to promote sustainability in their supply chains.

Specifically, the Fairtrade Foundation is calling on the CMA to issue specific guidance outlining how cross-business initiatives for sustainability purposes would be assessed under competition law.

It believes this would help businesses navigate the existing rules better and remove artificial fears about how joint action can be taken forward.

Additionally, Fairtrade wants the CMA to work harder at embedding long-term sustainability goals in its operations, taking account of this and broader UK policy goals when it assesses how well markets are functioning.

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Fairtrade recommends that the CMA starts to formally report on how it is contributing to delivering long-term food security for the UK.

Tim Aldred, Head of Policy at the Fairtrade Foundation said: “The world faces tremendous challenges in producing enough food to feed a growing population. Unstable supply chains are causing food shortages all over the world and this trend is set to continue unless we act.

“By working together businesses can take the lead in mitigating the fall-out from increasingly fragile supply chains and, at the same time, embed sustainability at the heart of their operations.

“We encourage the government and the CMA to do all they can to foster cooperation between businesses and companies to recognise the importance of collective action on this issue, in the long-term interests of both UK consumers and vulnerable farmers and workers growing the food we eat.

“With climate change affecting our ability to feed ourselves, and the world’s population set to reach 9.7bn by 2040, this is a global food security crisis which needs strong policy responses.”