Cross-Sector Sustainability Initiatives and Competition Law - A contradiction?
The Bundeskartellamt investigated the sector initiative of German retailers in cooperation with GIZ. No violation of competition law was found, rather the practical example shows the compatibility of sector initiatives with competition law.
The Bundeskartellamt comments on business cooperation and sustainability initiatives in a press release dated 18.01.2022. It reports that the Bundeskartellamt has completed its examination of two industry initiatives with sustainability objectives. One of the initiatives is the German retail sector's banana project on living wages commissioned by the German Federal Ministry for Economic Cooperation and Development.
The German Retailers' Working Group on Living Wages has joined together and committed to actively develop and implement responsible business practices in their global supply chains of private label products. A first joint pilot project on living wages in the banana sector was presented on 9th December. The members of the working group ALDI Nord, ALDI SÜD, dm-drogerie markt, Kaufland, Lidl and REWE Group have agreed on a step-by-step integration of Living Wage criteria into the banana portfolio of their own brands. The aim is to proactively contribute to a transformation of the banana sector through various measures.
More information on the project and the entire roadmap can also be found here on our website.
With the publication of the press release by the Bundeskartellamt, the working group reaches one of the milestones of the project: to create a practical example for the compatibility of sector initiatives with competitive law in the area of living wages and incomes.
The Bundeskartellamt stresses that it does not see any competition concerns regarding a voluntary commitment by retailers to common standards on wages in the banana sector. By further explanation, the Kartellamt states that the cooperation does not involve any exchange on purchase prices, other costs, production quantities or margins. Furthermore, there are no mandatory minimum prices or price mark-ups to be agreed between the members of the working group.
The working group appreciates the constructive exchange with the Bundeskartellamt and is pleased to send a signal with this decision that such a sustainability initiative is compatible with cartel law. This is an important signal also for future sector initiatives with sustainability objectives.
The Bundeskartellamt advises companies on cooperations and provides guidance on how these can be embedded in applicable competition law. Since sustainability initiatives often consist of agreements between competing companies, the Bundeskartellamt monitors whether the framework conditions under competition law are also complied with. In this context, care is taken to ensure that both the achievement of sustainability and public welfare goals and consumer choice are in harmony with competition. Competition law should not stand in the way of cooperations to achieve sustainability goals, but rather encourage sustainability initiatives, especially with regard to common standards, and ensure fair and transparent framework conditions.
To the Bundeskartellamt's press release of 18.01.2022.