Garden centers will make arrangements about curtailing the use of illegal pesticides. With these arrangements, they wish to help make the sector more sustainable, and to prevent growers from using substances that are harmful to humans, animals, and the environment. If growers of plants keep using illegal pesticides after the first warning, they will be barred from supplying to affiliated garden centers. Trade association Dutch Garden Retail Sector (in Dutch: Tuinbranche Nederland, TBNL) submitted the agreement made between hundreds of its members to the Netherlands Authority for Consumers and Markets (ACM). ACM has assessed the arrangements against the competition rules and its draft Guidelines on Sustainability Agreements, and has no objections against them.
Growers that use illegal pesticides may gain a competitive advantage, for example, because those plants grow better or because fewer plants die while growing them. ACM has ruled that the arrangements made between garden centers aimed at curtailing the use of illegal pesticides by growers do not violate the competition rules. That is because these rules are not meant to protect illicit competition such as competition based on the use of illegal pesticides.
Martijn Snoep, Chairman of the Board of ACM, explains: “Arrangements among competitors about excluding certain suppliers are usually at odds with the competition rules. However, some arrangements may still be allowed in order to prevent illicit competition, which is, for example, competition with products that have been manufactured using illegal production methods. Obviously, before any supplier is excluded, a due process needs to be followed. And that will be the case here.”
What was this case about?
Illegal pesticides are sometimes still used for the growth of ornamental plants. That is why the sellers of ornamental plants took the initiative to take measures themselves. Garden centers in the Netherlands such as Intratuin, Praxis, Welkoop, Hornbach, GroenRijk and Ranzijn will have plants randomly tested in accredited labs. Plants on which illegal pesticides are found will be refused. The other garden centers will be informed about those plants in order to prevent these from being sold elsewhere. Before the next delivery, the growers of those plants must declare that they no longer use the illegal substances, they must show what actions they have taken to prevent repeat violations. The garden centers conduct another test to check whether or not any illegal substances have indeed been used. The growers may then start supplying the affiliated garden centers again. In this way, the garden centers seek to make the floricultural sector more sustainable.
What is ACM’s opinion?
ACM has tested the arrangements against the competition rules and its draft Guidelines on Sustainability Agreements. After all, this initiative concerns agreements between competitors about collectively excluding (temporarily) growers of certain products. As illegal pesticides are still used despite regulatory oversight, the garden retail sector itself has taken the initiative to make arrangements in order to stop the use of such pesticides. These types of arrangements need to be open and transparent, and a due process needs to be in place and followed before any supplier is excluded. On that basis, ACM does not have any objections against the arrangements.
ACM and sustainability
ACM ensures that markets work well for people and businesses, now and in the future. Sustainable products and consumption are important in the transition to a more sustainable society. ACM wishes to create the right conditions for promoting the energy transition and sustainability transition. ACM eliminates obstacles, and offers leeway where needed and possible. We do so not just for businesses that wish to make sustainability agreements, but also for example for network operators that wish to experiment with alternative energy sources. In addition, ACM takes action against businesses that use misleading sustainability claims on their products.
ACM provides answers to the question in what situations competitors are and are not allowed to collaborate with each other in order to realize sustainability objectives. If you have trouble finding an answer or you and/or your advisors seek more information about the draft guidelines regarding sustainability agreements, please send an email to info [at] acm [punt] nl.
02-09-2022 Letter in response to sustainability initiative about reduction of illegal pesticides in garden retail sector
26-01-2021 Guidelines on sustainability agreements are ready for further European coordination
26-01-2021 Second draft version: Guidelines on Sustainability Agreements – Opportunities within competition law