On Monday 28 February, the European Commission launched a stakeholder consultation on agreements to achieve sustainability targets in agri-food supply chains.
The feedback will help the European Commission to draft guidelines on a new derogation exempting sustainability agreements in agriculture from competition rules under certain conditions.
EU law generally prohibits agreements between companies that restrict competition, such as agreements between competitors that lead to higher prices or lower quantities. However, the European Parliament and the EU Council have recently adopted a new derogation allowing such restrictions in agreements in the agriculture sector if they are necessary to achieve higher sustainability standards than mandatory European or national standards. This derogation is provided for in the Common Market Organisation Regulation (1308/2013) which is part of the EU’s Common Agricultural Policy (CAP).
The agreements must pursue certain environmental objectives: the reduction of pesticide use and of the danger of antimicrobial resistance, and the protection of animal health and welfare. The parties to these agreements must be agricultural producers, acting possibly with other actors from the supply chain.
The EU Council and the Parliament have asked the European Commission to publish guidelines on the conditions of application of this derogation by 8 December 2023. It would also help the European Commission to fulfil its mandate under the Farm to Fork strategy to clarify the scope of the competition rules for collective actions in agriculture.
The European Commission is consulting stakeholders to understand the types of sustainability agreements they have developed so far or would like to develop, the potential restrictions on competition that may result from these agreements, and the possible impact of this cooperation on supply, prices, and innovation.
All stakeholders are invited to submit their views on the European Commission’s consultation website until 23 May 2022. The European Commission plans to hold a public consultation on the draft guidelines in 2023.
New CAP. Under the new 2023-2027 CAP, the co-legislators adopted, in 2021, a new derogation from the competition rules for agricultural products, which is contained in Article 210a of Regulation 2021/2117 amending Regulation 1308/2013 (CMO).
The provisions stipulate that agreements to achieve a set of sustainability objectives by applying higher standards than are mandatory under European and/or national law are permitted, provided that the resulting restrictions of competition are indispensable to the achievement of the objectives at stake. In addition, the European Commission and national competition authorities have the right to stop or require changes to sustainability agreements if this is necessary to prevent the exclusion of competition or if it is considered that the objectives set out in Article 39 of the Treaty are being jeopardised. (Original version in French by Lionel Changeur)