January 2, 2024

CMA provides Fairtrade Foundation with informal guidance under Green Agreements Guidance

The UK Competition and Markets Authority (“CMA”) recently issued the first informal guidance provided under the new open-door policy established as part of the CMA’s Green Agreements Guidance.  In October 2023, in an effort to help businesses address climate change and promote environmental sustainability, the CMA published the Green Agreements Guidance to advise businesses on how competition law, and specifically the Chapter I provision of the Competition Act 1998, applies to environmental sustainability agreements between businesses operating at the same level of the supply chain.  According to the CMA, the goal of its open door policy is to enable UK businesses, non-governmental organizations, trade associations and charities to request informal guidance that will enable them to confidently reach their environmental goals while ensuring that consumers are protected.

The informal guidance was requested by the Fairtrade Foundation, a charitable organization that recently implemented a new Shared Impact Initiative aimed at improving sustainability and resilience in food supply chains.  According to Fairtrade, the initiative would enable participating grocery retailers in the UK to enter into long-term contracts with Fairtrade producers that use environmentally sustainable farming practices – contracts in which the retailers would agree to purchase minimum volumes of certain food items from a pool of Fairtrade producers.  The CMA indicated that Fairtrade’s initiative was unlikely to raise competition concerns.

UK Government Press Release