Fairtrade: Competition law hinders food supply chain sustainability

New research from the Fairtrade Foundation reveals that businesses are wary of working with rivals to strengthen supply chains as they fear falling foul of competition law.

Fairtrade's research comes in the same week as a new report by the Sustainable Food Trust highlighted £120bn of annual hidden costs of food for the UK taxpayer

Fairtrade's research comes in the same week as a new report by the Sustainable Food Trust highlighted £120bn of annual hidden costs of food for the UK taxpayer

This is hindering the ability of companies to boost consumer choice through improved product quality and security of supply, according to the study. Fairtrade also highlights potential missed opportunities to deliver social and environmental benefits for supply chain farmers.

The Foundation has called on the Government and Competition and Markets Authority (CMA) to encourage private sector partnerships to tackle supply chain issues such as climate change and fluctuating prices.

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

Specifically, the Foundation wants the CMA to issue guidance on how cross-business sustainability projects would be assessed under competition law. The CMA should also aim for a deeper embedding of sustainability aims in its own operations, insists Fairtrade, which recommends that the CMA starts to formally report on how it contributes to deliver long-term food security for Britain.

Hidden cost of food

Fairtrade's research comes in the same week as a new report by the Sustainable Food Trust highlighted £120bn of annual hidden costs of food for the UK taxpayer. With £120bn spent on food each year by consumers, this means that British citizens are, in effect, paying twice for their food, the report found.

The most significant share of this amount reportedly comes from the damaging impacts of intensive food production methods, such as environmental pollution, soil degradation and biodiversity loss.

The Sustainable Food Trust found that taxpayer subsidies to farmers are the equivalent to just 2.5p of every pound spent on food in hidden ways. The authors suggest that post-Brexit subsidy funds to farmers should be used to incentivise more sustainable methods of food production. They also propose taxes for the most harmful aspects of intensive agriculture.

The Sustainable Food Trust’s chief executive Patrick Holden said: "Those who pollute or degrade do not pay for the damage they cause. Conversely, those who farm more sustainably are forced to cover the higher cost of producing food in more beneficial ways.

“This means there is no business case for producers to adopt more sustainable approaches. The Government can and must factor in these hidden costs and benefits in developing post-Brexit food and farming policies.”

Food and drink sector insight

The food and drink industry is experiencing an era of unprecedented change, driven by technological advances, new global frameworks and a transformation of the supply chain to build resilience across the global food system.

edie recently published an exclusive Insight report, which explores some of the key drivers, challenges and opportunities facing sustainability in the UK's food and drink manufacturing sector.

George Ogleby


fairtrade | supply chain | Corporate Social Responsibility


CSR & ethics
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