UK: CMA asked to pause competition law to avoid food shortages

Britain’s food and drinks industry has asked the government to suspend competition law in the event of a no-deal Brexit so that firms can work together to avert food shortages without facing large fines for collusion, reported the Guardian.

Collaboration between large companies is controlled to prevent cartels harming consumers’ interests. The Food and Drink Federation (FDF) told the BBC the government had not yet confirmed whether companies would be able to work together to direct food supplies to the areas of greatest need if there were delays as a result of crashing out of the EU.

Many trade experts, from the government’s own analysts to the Bank of England, expect a no-deal Brexit to cause severe disruption at ports, potentially delaying food imports. Prime minister Boris Johnson has committed to leaving the EU on October 31 whatever the implications, and has put Michael Gove in charge of preparing to exit without a deal.

“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’s chief operating officer, Tim Rycroft, said.

The Competition and Markets Authority could be legally obliged to fine manufacturers if they work together. The competition regulator does not have the power to decide to waive the fines, but the government can order their suspension under exceptional circumstances. The government has used this power four times before, including to protect petrol supplies during the 2012 fuel crisis.