Sustainability and competition law has been high on the agenda of the European Commission and several national competition authorities. Last year, the European Commission published its Draft Horizontal Guidelines, which contains a new chapter on sustainability cooperation and agreements.
This Commission’s guidelines come on top of the activities of national competition authorities, which have also been active in this space. Notably, the Dutch Competition Authority published draft guidelines in 2020.
The Belgian Competition Authority (“BCA”) has now followed suit. The case concerns the sustainability commitment of IDH Sustainable Trade, a social company which accelerates and upscales sustainable trade by building impact-oriented coalitions of front-running companies, civil society organizations, governments and other stakeholders. In December 2022, IDH Sustainable Trade reported that five Belgian retailers had signed a commitment to ensure a living wage for banana workers throughout their international supply chains by 2027. The project covers fresh bananas sold on the Belgian market either as branded or private label products.
In a press release of 30 March 2023, the BCA announced that it had reviewed the initiative and found no competition law concerns.
The BCA explains that sustainability initiatives consisting of partnerships between companies can require a complex balancing of interests between the environmental and sustainability benefits of the cooperation and their effects on competition. It is noteworthy that, like the Commission’s Draft Horizontal Guidelines, the BCA here also confirms that sustainability is a broad concept that also encompasses social development (including labour and human rights).
In this case, the BCA considered that the balance tipped in favour of the sustainability benefits. In its analysis, it took into account the following parameters, which reflect the European Commission’s Draft Horizontal Guidelines on sustainability standard agreements:
On the basis of those parameters, the BCA concluded that the initiative does not raise competition issues and found that:
With the press release, the BCA shows that it will apply the principles of the Commission’s Draft Horizontal Guidelines in practice. It is clearly open for parties to discuss this type of agreement in order to increase legal certainty.
For more information, please contact Hein Hobbelen, Baptist Vleeshouwers or Ruben Verdoodt