Federal Cartel Office gives green light for sustainability initiative in the plant trade

The German Federal Cartel Office (FCO) has no serious objections to the introduction of a reusable tray-system in the plant trade. Euro Plant Tray eG – a co-operative association of various companies in the European plant trade, plant production and industry associations – had asked the FCO for an legal assessment of a planned joint reusable tray-system. The antitrust authority has now given the green light for the sustainability initiative.

The Euro Plant Tray project

At present, plants on the European market are usually sold in disposable plastic carriers along the various stages of the value chain. Euro Plant Tray eG aims to replace these single-use trays with a reusable system for the B2B transport of potted plants. The aim is to reduce plastic waste. However, agreements on sustainability standards can also restrict competition and fall under the prohibition of cartels in form of coordinated behaviour. The agreed joint use of reusable trays for plants by various market participants therefore had to be reviewed by the FCO.

"Sustainability initiatives must also be measured against the standards of antitrust law." Andreas Mundt, President of the FCO, points out. However, the Euro Plant Tray project not only pursues the very sensible goal of reducing plastic waste in the plant trade, says Mundt, but is also in line with antitrust regulations. "The project is another example of a sustainability initiative in which the German Federal Cartel Office supports companies in complying with the framework conditions of antitrust law. Sustainability requires functioning competition that ensures innovation – also in the long term – and prevents unreasonable price increases and quality reductions."

For the FCO to support the project in its unchanged form, it was particularly important that the coordination and exchange of information between the market participants was limited to the extent necessary for the introduction and operation of the reusable system. Company-specific, strategic data is collected by neutral third parties and only made available to the project participants in accumulated and aggregated form. In terms of competition law, it was also relevant that participation in the Euro Plant Tray eG reusable tray system is voluntary and open to all market participants at the various stages of the value chain, including non-members of Euro Plant Tray eG. Members can also continue to use trays from other suppliers.

Comment

More and more industries are incorporating sustainability considerations into their business decisions for both idealistic and legal reasons - the German Supply Chain Act comes to mind. Sustainability initiatives often consist of agreements between competing companies on strategically relevant, competition-related issues. These companies must therefore comply with antitrust regulations. The FCO offers advice and guidance on this to ensure that sustainability goals are achieved in harmony with competition. Examples of such initiatives that the FCO has recently reviewed are the sustainable cocoa initiative, the animal welfare initiative and the living wage initiative for bananas.

The legal framework for the assessment of sustainability initiatives has also evolved in the European Union. On June 1^st 2023, the European Commission published new guidelines on the antitrust assessment of horizontal co-operation agreements, which now also include a chapter on dealing with sustainability initiatives. In addition, Article 210a of the Regulation on a Common Market Organisation for Agricultural Products (CMO) came into force on 7 December 2021, which provides for an antitrust exemption for sustainability agreements between producers of agricultural products under certain conditions. This exemption is taken into account by the FCO in its cases. In December 2023, the EU Commission also published guidelines on the application of Article 210a CMO.

Fieldfisher will be offering a webinar on sustainability initiatives early this summer.

Sources

The FCO will publish a case report shortly.
Press release of the FCO dated May 8^th 2024