C 164/118
EN
Official Journal of the European Union
19.4.2022
Prevent Waste, a non-governmental organisation, has criticised the ‘empty box’ strategy of the breakfast cereal producers as wasteful and harmful for the environment, using more natural resources than it is necessary for the efficient production and distribution of these products.
In response, the breakfast cereal producers, organised in their trade organisation have agreed to limit the excess packaging of their products.
They have collectively agreed to limit the excess to no more than 3 % to ensure that cereal boxes are still easy to use and have made their decision public.
The producers have implemented the agreement since the beginning of the year and it covers 100 % of the market.
As a result, packaging costs, which make up 6 % of the wholesale price, have decreased by around 10 %.
This has led to a decrease of around 0,5 % in the wholesale price of breakfast cereals and a 0-0,5 % decrease in the retail price.
Analysis: Competitors agree on an element that impacts the price of the product, but they do so in a transparent manner, allowing everyone to adopt the approach withouth imposing an obligation to do so.
There is no exchange of sensitive information and compliance with the decision is easy to monitor.
In addition, cereal producers remain free to further reduce their own packaging if they so wish.
Moreover, the agreement to limit excess packaging has a very small and even downward effect on the price of breakfast cereals, does not affect competition between the cereal producers on the main parameters of price, quality and innovation, and only affects competition on marketing to a very limited extent (in view of the apparently limited impact of the box 'oversizing' strategy).
The agreement therefore meets the conditions of the safe harbour and is thus not caught by Article 101(1).
The agreement actually improves the outcome for consumers, by eliminating costly excess packaging strategies which have little impact on competition.
618.
An agreement having no appreciable effect on competition
Example 2 Situation: Fair Tropical Fruits, a non-governmental organisation, together with a number of fruit traders, have set up a label for fair-traded tropical fruits (the ‘FTF’ label).
In order to use the label, firms trading in tropical fruits must guarantee that the fruits in question comes from farms where certain minimum conditions as regards safe use of pesticides, are respected.
These firms remain free to also trade fruits under other labels.
Fair Tropical Fruits has set up a monitoring system to certify that the products sold under the FTF label comply with the minimum conditions.
The conditions for participation and the methodology and results of the monitoring system are available on the website of Fair Tropical Fruits.
The fruits sold under the FTF label are more expensive than other tropical fruits traded.
The FTF label has been introduced EU-wide and a number of large traders use the label and have signed the agreement to respect the label's minimum conditions.
The label has quickly become popular with certain consumers.
Depending on the type of tropical fruit and the geographic market concerned, market shares for fruits sold in the EU under the label now range from 2,6 % for pineapples to 14,7 % for mangoes.
The remainder of the market is supplied by the same traders operating outside the label and by other traders not party to the agreement.
Analysis: The higher price of the fruits sold under the FTF label, may require assessing the effects of the agreement.
However, in view of the modest market shares of the products covered by the agreement in the various markets in the EU, the significant market shares held by, and competition from, other labels and conventional products, the fact that participation in the FTF label is on a voluntary and non-exclusive basis and that the licence to use the label is dependent only on respecting certain minimum conditions, the agreements to establish and license the label are unlikely to lead to appreciable negative effects.
The agreements are thus not caught by Article 101(1).
The agreements may actually widen the choice available to consumers, by enabling them to identify products which have 'fair trade' characteristics.