by Symela Touchtidou @stouchtidou
The case is known in Europe as the “Chicken of Tomorrow” case.
Back in the early 2010’s, supermarkets, poultry farmers, and broiler meat processors in the Netherlands have made “arrangements amongst each other regarding the selling of chicken meat produced under enhanced animal welfare-friendly conditions”.
Their initiative was called ‘Chicken of Tomorrow’. Naturally that chicken was more expensinve than the regular one. That drew the attention of the Netherlands Authority for Consumers and Markets (ACM) as Dutch supermarkets removed regular chicken meat from the shelves.
The ACM decided that “on balance, consumers did not benefit from these arrangements”.
“Chicken of Tomorrow” was terminated.
A lot of water has gone under the bridge since then. Green transition, animal welfare and sustainability have become top priorities for Europe. National Competition Authorities now seek to make the best of both worlds: promoting sustainability and safuguarding competition.
It started again in the Netherlands.
ACM admits that “agreements between undertakings can contribute in an effective manner to the realization of public sustainability objectives”. Not to repeat the mistakes of the “Chicken of Tomorrow” case, ACM explains in detail how competition law is applied to sustainability agreements made between undertakings. It also promises consultation with all parties involved, guidance and flexibility in imposing fines.
Next came Greece.
The Hellenic Competition Commission (HCC) published an extensive staff discussion paper aiming at “a dialogue to find and integrate methods and tools of valuation, analysis and assessment of business practices in the field of economics and competition law, taking into account the extent to which they favor or suspend specific sustainable solutions.”
“Green transition will require significant investments” , Ioannis Lianos, president of the HCC, told Greek Business File. “As is well known, in Greece bank lending is problematic. For small and medium-sized companies it is particularly hard to get a loan. So there is a lack of available funds. In Greece we have a large number of very small businesses compared to other Member States. So it is difficult for them to make investments and “go green”. It is therefore important that they do so in cooperation with each other. So issues of competition law arise. There is the risk that competition law might act as a deterrent to such collaborations.
Many studies, mainly in Europe, show that CEOs state competition law as a disincentive to new product collaborations, new production standards that could promote a green transition.
That is why we believe that companies should be given greater legal leeway.”
Companies from the energy sector in Greece are already looking for ways to make use of the new competition environment.
Taking a step further in the coming weeks, the Hellenic Competition Authority will make available a competition law sustainability “sandbox”.
A sandbox is defined as ‘a safe space where both regulated and unregulated firms can experiment with innovative products, services, business models and delivery mechanisms without immediately incurring all the normal regulatory consequences of engaging in such activity’.
The aim is to allow companies “experiment with new business formats to realise more quickly and efficiently sustainability goals, and which involve cooperation between competing undertakings.”
The Dutch and Greek initiatives have been praised by Margrethe Vestager, European Commissioner for Competition, at the Conference on Competition Policy Contributing to the European Green Deal, on February 4.
"Already, some of Europe’s national competition authorities – like the authorities in Greece and the Netherlands – have made important contributions to that debate." Commissioner Vestager on the Green Deal https://t.co/jf9NIrKDor
— Ioannis Lianos (@IoannisLianos) February 15, 2021
Shortly after, Rome contacted Amsterdam and Athens to join the effort.
The European Commission has launched an overall review of its competition rules “to make sure they are fit for purpose, in a changing world – a world of twin, green and digital, transitions, and of growing challenges to fair and open global trade.”
In 2021, it is expected to present updated framework and guidance on horizontal cooperation between competitors and vertical supply agreements.