UK food industry urges government to suspend competition law

The UK food industry has urged the government to waive certain rules of the competition law to counter food shortages in case of no-deal Brexit.

To prevent cartels harming consumer interests, prevailing rules prevent food and drink companies from discussing supply or pricing.

The Food and Drink Federation (FDF), which represents a wide range of food companies and trade associations, said: “We asked for these reassurances at the end of last year. But we’re still waiting.”

FDF COO Tim Rycroft said: “Competition law is important, but in the event of no-deal disruption, if the government wants the food supply chain to work together to tackle likely shortages, to decide where to prioritise shipments, they will have to provide cast-iron written reassurances that competition law will not be strictly applied to those discussions.”

FDF further added that food and beverage companies, including Associated British Foods, Mondelēz and Nestlé, who are also members of the FDF, could end up paying fines to the Competition and Markets Authority (CMA) if they work in a collaborative manner.

The CMA will have a legal right to fine the companies that work together, as it is prohibited according to the existing rules, but it does not have the authority to make a decision or waive fines.

The government has the provision to suspend this order under exceptional situations.

CMA official Andrew Tyrie said: “This is a matter for government as the secretary of state can exempt certain agreements from competition law in the public interest. The CMA stands ready to advise government as necessary in its preparations for a no-deal exit.”

The UK’s food and drink industry is said to be the largest manufacturing sector in the country, which currently offers employment to four million people.