Chillin'Competition

If there are two eternal truths about competition (and strategies to restrict competition), they must be the following. First, State regulation is always the most effective mechanism to prevent the emergence or growth of a rival. Second, the declared goal of some of the most egregious restrictions of competition is often the protection of consumers.

I am frequently reminded of these truths whenever I read about the various tactics that the meat industry displays to curtail the growth of plant-based alternatives to their products, which are increasingly popular as more environmentally-friendly (and typically healthier) options.

The most salient (and probably most effective) of these tactics involves lobbying governments and legislatures to ban, by law, the use of terms such as ‘burger’ or ‘sausage’ in vegan or vegetarian products. Given the clout that these incumbents have, it comes as no surprise that lobbying efforts have delivered the expected results in a number of Member States (see for instance here) and that measures have been contemplated in others (see here).

These measures are invariably put in place in the name of consumer protection. Because this justification is not particularly effective at concealing the underlying (and fairly transparent) motivation, it is equally unsurprising that regulatory bans have been found by the Court of Justice to run counter to secondary EU law (see here for its judgment in Protéines France, delivered last week).

One question, against this background, is whether competition law has a role to play when addressing conduct and regulation aimed at hindering the growth of emerging players in this space (including both plant-based and lab-based alternatives to meat).

Insofar as regulatory bans involve, by definition, State intervention, the application of Articles 101 and 102 TFEU is not possible. In principle, restrictions that are not attributable to the behaviour of undertakings (as Deutsche Telekom would confirm) escape antitrust scrutiny. It is the privileged realm of the State-action doctrine.

This said, one can conceive a number of scenarios in which cooperation with the object of distorting competition in this space could be tackled by Articles 101 and 102 TFEU.

There would be an infringement, for instance, where State intervention requires or favours the implementation of restrictive conduct by private undertakings. This old doctrine was discussed by the Court in, for instance, CIF.

Suppose that key players along the value chain (meat producers and grocery chains) get together to agree on some guidelines about the labelling and presentation of plant-based alternatives (as in Nederlandse Federatieve Vereniging voor de Groothandel op Elektrotechnisch Gebied) and that, subsequently, the government rubber-stamps the agreement. Such a scenario would be clearly caught by Article 101(1) TFEU (and some variations thereof are not inconceivable in the real world).

Consider a second scenario. Suppose that the associations of meat producers and wholesalers demand that grocery chains sell plant-based alternatives in different aisles as a condition for the supply of their products. Such a decision would also be caught, by its very nature, by Article 101(1) TFEU.

A variation of this second scenario would include an instance in which an association of meat producers starts a disparagement campaign against plant-based alternatives (arguing, inter alia, that they are unsafe to eat, or that they induce nutritional deficiencies). The ‘other’ Hoffmann-La Roche judgment (the one delivered in 2018) makes it clear that such strategies may amount to a restriction by object.

Another question that emerges is whether these are practices that should be prioritised by competition authorities. Given the potential benefits for society in terms of emissions and environmental footprint, and given the fact that they are innovative propositions adding competition and dynamism to the market, one could convincingly argue that the case for prioritisation, in the current (and rapidly changing) climate, is very strong.