Unfair Trading Practice Regulation and Voluntary Agreements targeting food waste: A policy assessment in select EU Member States

This report provides a qualitative assessment of Voluntary Agreements (VAs) and Unfair Trading Practices (UTPs) as two typologies of policy interventions having an impact on food loss and waste. To carry out this assessment, two sets of country-based comparative case studies were developed, namely in the UK and Italy for regulations against UTPs, and in the UK and the Netherlands for VAs. The report found that, for both VAs and regulations against UTPs, a preliminary assessment of underlying food supply chain market structure is important to identify the most appropriate policy measures for a specific EU MS (e.g. the size and number of actors at each level of the food supply chain, the level of market concentration and power imbalance among actors, etc.). Specifically concerning UTPs, the following was identified: - Food supply chains are particularly susceptible to UTPs in MS where market power is concentrated within a few large retailers interacting with many suppliers. Perishable products, such as fresh fruits and vegetables supplied direct from primary producers to retailers are particularly at risk due to the time constraints in finding alternate outlets; - It is important to identify solutions for food surplus generated by UTPs (ex: redistributing surplus that results from order cancellations linked to UTPs or ensuring that the “wrongdoer” assumes the responsibility of the food product resulting from the UTPs); - To tackle UTPs, it was found that an effective approach would be the creation of an independent authority to investigate any infringement of good trading practices, (ex: through an industry code of practice, and, if needed, the introduction of sanctions on actors who are found to have not met the standard required by the industry code; - Other recommendations identified include adopting a common EU-level definition of UTPs in relation to grocery supply to avoid unequal treatment of comparable situations across EU, and to allow the judgement of cases based on the principle of equity. Furthermore, indirect and foreign suppliers also need to be protected against UTPs. Specifically concerning VAs the following was identified: - The level and the nature of funding has a significant impact on their lifetime and agendas (a mix of public and private is optimal); - To ensure a VA’s relevance, signatories must benefit from their participating, either financially or in terms of heightened visibility; - VAs should establish ambitious yet realistic targets, achievable by their signatories, and robustness and transparency of data reporting should be forefront to ensure the credibility of the initiatives; - VAs can be implemented alongside compulsory legislation or provide an alternative to it. An advantage of them, compared to legislation, is that they can be designed and adapted relatively quickly depending on political goals related to food waste; - The role of a third party is crucial in managing a VA, notably to facilitate actor accession to it, ensure confidentiality of data, supervise and eventually nudge compliance with the agreement. The report ultimately shows that VAs and UTPs interlinked as VAs can be an effective tool to explore the effects of regulation against UTPs and assess actors’ readiness to avoid market power abuse.