ACM is favorable to joint agreement between soft-drink suppliers about discontinuation of plastic handles
Soft-drink suppliers, including Coca-Cola, Vrumona, and supermarket chains Albert Heijn and Jumbo, wish to make arrangements regarding the discontinuation of plastic handles on all soft-drink and water multipacks. The Netherlands Authority for Consumers and Markets (ACM) has assessed their plans, and is favorable to the agreement. Soft-drink multipacks consist of, for example, six bottles of soda, wrapped in plastic with a plastic handle on top. By removing the handles on these multipacks, they become more recyclable, and less plastic is needed. With this joint agreement, over 70% of multipacks will no longer have handles.
The agreement helps realize sustainability goals, while not having any negative effects on consumers. In its assessment, ACM applied its draft Guidelines regarding sustainability agreements.
What was ACM’s assessment?
In this particular case, several competitors wish to make joint arrangements regarding the discontinuation of plastic handles on their packaging. The suppliers first carried out a self-assessment to see whether their arrangements were compatible with competition rules. Coca-Cola subsequently asked ACM for an opinion. One element of the assessment is to see whether the arrangements negatively affect competition and harm consumers, for example, as a result of higher prices or reduced product quality. That is not the case here.
According to the suppliers, the handles (or the ease thereof) do not play a role in the competitive process. A market study conducted by several of the suppliers did not reveal any other findings either.
In addition, ACM finds it important that the agreement offers participants the opportunity to continue making their own decisions (sustainable or otherwise). For example, each participant decides for themselves when and how they discontinue adding handles to their multipacks.
That is why ACM believes it is plausible that the arrangements do not restrict competition, and are therefore allowed. In its assessment, ACM applied the draft Guidelines regarding sustainability agreements. These guidelines describe five categories of agreements that are not considered anticompetitive, and that are thus allowed. This agreement falls in at least two of these categories:
- “agreements that incentivize undertakings to make a positive contribution to a sustainability objective without being binding on the individual undertakings”;
- “agreements that are aimed at improving product quality, while, at the same time, certain products or products that are produced in a less sustainable manner are no longer sold”.
ACM reminds the soft-drink suppliers of the general principles regarding sustainability claims, which have been listed in the Guidelines regarding sustainability claims. Companies must be honest about sustainability aspects, and are only allowed to use clear, correct, and relevant sustainability claims. These principles also apply if the suppliers go ahead with their plans, and wish to include that fact in their advertising and messaging.
ACM and sustainability
The assessment of this sustainability agreement reveals it is compatible with competition rules. Businesses can join forces in an effective manner while, at the same time, also helping realize sustainability objectives, without violating competition rules. For example, it turns out that their plan does not restrict mutual competition at all or that their plan does restrict competition but that it is necessary for realizing sustainability objectives. In such situations, the benefits of the sustainability agreement are weighed against the costs of the restriction of competition.
ACM provides answers to the question in what situations competitors are 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.
Want to know more about cooperation and sustainability? Visit our page on Cooperation and Sustainability (in Dutch).