Environmental Audit Committee calls on Government to ensure CMA remit takes account of sustainable developmentMay 13th, 2012
The Government must develop a joined-up strategy to change the UK’s unhealthy and environmentally damaging food system, as fears mount about global food security, MPs on the Commons Environmental Audit Committee warn.
Crucially the Environmental Audit Committee’s Sustainable Food report recommends that:
the Office of Fair Trading’s remit should be amended so supermarkets are not blocked from cooperating on sustainability initiatives.
The full report reads…
43. ‘Choice editing’ involves retailers limiting the range of products they make available to customers. Supermarkets, for example, might be able restrict the sale of produce with high environmental impact, for example, by reducing the numbers of some out-of-season and imported goods. The Food Ethics Council has argued that retailers pursuing choice editing strategies are likely to be at a competitive disadvantage. With the exception of a minority of businesses that position themselves specifically as leaders in the ‘ethical’ market, businesses that raise the prices of their products or reduce choice risk losing customers to their competitors. They concluded that, in the absence of regulatory intervention by Government, only a coordinated effort by the major businesses across a sector could get past this obstacle. By co-operating and adopting similar choice editing strategies, supermarkets would be able to reduce the risks of pursuing such strategies. However, such collaboration would potentially contravene competition law and expose those involved to challenge by the Office of Fair Trading or by the European Commission. And any regulatory regime with similar aims could also be construed as interference with EU Single Market rules. This barrier would also apply to public procurement through Government Buying Standards (paragraph 45). The Food and Drink Federation’s preferred approach was therefore for industry to continue its efforts to make its products as healthy and sustainable as possible, while offering consumers appropriate choices.81 When we raised this issue with the Minister, he regarded this as primarily an issue for industry to judge:
I recognise that the supermarkets are extremely nervous about competition law. … We do have periodic meetings with the senior chief executives of the supermarkets, but it is on a very clear agenda that makes sure that … we can’t talk about price or anything that could be construed as collusion. I can see the argument that they would be very nervous of it, yes. You would need to ask a lawyer whether in reality there is something in competition law that says they should not work together on sustainability. I don’t know. That would be for a lawyer to judge, but I am very conscious of their sensitivity over anything like that.
44. In March 2012, the Government announced proposals to create a new Competition and Markets Authority that would bring the Competition Commission and the OFT’s competition functions into a single organisation. The Government should amend the Office of Fair Trading’s remit to take account of sustainable development while protecting competition, and task the OFT and the Competition & Markets Authority to investigate and clarify the scope for supermarkets to cooperate in developing shared sustainability good practice.