The Fairtrade Foundation has published a report suggesting that competition law can deter businesses from working together to promote sustainability in the supply chain.

The Fairtrade Foundation 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”.

Businesses are wary of working with their rivals in a market to strengthen supply chains as they are in fear of being accused of working as cartels. Farmers and producers however are facing uncertain futures due to fluctuating prices and climate change, according to the report.

Ideally, the Fairtrade Foundation wants clarity on the law from the Competition and Markets Authority (CMA). The report calls for the CMA to encourage businesses to work together to promote sustainability in the supply chain. It calls 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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