Competition law hinders sustainability in supply chains

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Competition law can deter businesses working together to promote sustainability in supply chains, according to a new report by the Fairtrade Foundation.

The report found that “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”.

The foundation said that businesses are often wary of working with rivals to strengthen supply chains because they fear falling foul of competition law. But farmers and producers are currently facing an uncertain future prompted by fluctuating prices and climate change, according to the foundation.

It 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 foundation is asking for the CMA to “issue specific guidance outlining how cross-business initiatives for sustainability purposes would be assessed under competition law.”

“The world faces tremendous challenges in producing enough food to feed a growing population,” said Tim Aldred, head of policy at the Fairtrade Foundation. “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.”

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