Research reveals food security undermined by competition law

Research reveals food security undermined by competition law
Credit: Chess Ocampo

A new report has found that rather than helping efforts to strengthen food security, competition law can sometimes be a hindrance.

The report from Fairtrade Foundation reveals 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 producers and farmers.

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

This, it said, would help businesses navigate the existing rules better and remove artificial fears about how joint action can be taken forward.

As part of the report – commissioned by Fairtrade from the New Economics Foundation – a number of hypothetical collaborations were modelled to illustrate how they would work in practice and what the financial implications would be.

In every instance the value to the consumer, through improved product quality and stability of supply, is greater than any additional cost.

The report showed that people are increasingly looking to business and government to solve this issue.

A survey, commissioned as part of the research, showed that the public overwhelmingly believe it is the responsibility of retailers to ensure sustainable food production while 72% expect the government to ensure food is produced to high ethical and environmental standards.

“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,” said Tim Aldred, Head of Policy at the Fairtrade Foundation.

“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.”