German competition authority Bundeskartellamt, has concluded the examination of two separate business cooperations and sustainability initiatives which are an initiative launched by the German retail sector and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH to introduce living wages in the banana sector and current plans on expanding the animal welfare initiative “Initiative Tierwohl” to include cattle fattening. These examinations are part of the authority’s offer to advise businesses on cooperations and provide guidance especially on how to ensure that sustainability strategies are embedded in competition law.
Regarding the living wages in banana sector, a sector cooperation in the food retail industry is to agree on voluntary common standards and strategic goals along the private-label banana supply chain. The core objective is to jointly introduce responsible procurement practices and develop processes to monitor transparent wages. At the same time, the participating companies are planning to gradually increase the sales volume of bananas which are produced and procured in line with living-wages criteria. However, no information on procurement prices, other costs, production volumes or margins will be exchanged.
Regarding the animal welfare initiative “Initiative Tierwohl”, is a project based on an agreement between the agricultural, meat production and food retail sectors and wishes to reward livestock owners for improving the conditions in which animals are kept. The initiative is mainly financed by four largest food retailers. A key component of the initiative is paying participating livestock owners a standard premium (referred to as “animal welfare payment”) via the participating slaughterhouses.
As a result of its examinations regarding the two initiatives pointed below, Bundeskartellamt stated that it has no competition concerns about the food retail sector’s voluntary commitment to set common standards for wages in the banana sector, on the other hand, it encouraged the initiative to introduce in several stages a clear labelling for meat produced in line with animal welfare criteria (referred to as “Nämlichkeit”) to make the conditions in which animals are kept and their origin transparent for consumers.
(Bundeskartellamt – 18.01.2022)
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NAZALI TAX & LEGAL |