- Defra asked OIM in August 2022 to examine impact of its
proposed ban of horticultural peat sales in England
- OIM finds no likely major impact on intra-UK trade
- Report is the first published by OIM since its establishment
in September 2021
Horticultural peat is mainly used in multi-purpose compost. The
market for compost is worth around £400m in the UK.
The report follows a request from the Secretary of State for
Environment, Food and Rural Affairs for the Office for the
Internal Market (OIM) – which sits within the Competition and
Markets Authority (CMA) – to examine how the proposed ban may
impact the effective operation of the internal market. The
proposed ban is intended to tackle climate change by protecting
peat bogs that are an important store of carbon.
The report concludes that, while the ban on horticultural peat
sales in England may lead to some changes in patterns of buying
and selling of peat-containing compost within the UK that could
have an impact on individual businesses, these are likely to be
modest in the context of the overall market. The OIM does not
expect there to be a significant impact on wider competition
within the compost market. More specifically, the report finds
that the likely effect on intra-UK trade will be modest because:
- only one in 10 consumers is ‘strongly motivated’ to buy a
peat-containing compost
- many large retailers have already made commitments to stock
only peat-free compost by the time the ban is introduced
- most manufacturers have already invested in research and
development and new facilities necessary to make peat-free
compost. Many will switch from producing peat-containing compost
to peat-free compost rather than exit the market
- the Scottish and Welsh Governments have also signalled their
intention to ban the sale of horticultural peat
Nevertheless, the report also notes that there may be some sales
of peat-containing compost after the introduction of the ban,
most likely through a small group of retailers who will still be
willing to stock it. In addition, the report finds that shortages
of the necessary inputs, especially if they persist, will
increase the incentives for manufacturers and retailers to bring
peat-containing compost into England from elsewhere in the UK.
Northern Ireland is the most likely source of peat-containing
compost to be brought into England after the ban is implemented.
The use of horticultural peat across the UK has been in decline
for the last 10 years. The Scottish and Welsh Governments have
also signalled their intention to ban the sale of horticultural
peat. The UK has been successful in producing peat-free
alternatives – almost doubling its peat-free production in the
past decade – but significant additional peat-free material will
be needed in the coming years to replace the peat that is
currently used.
Murdoch MacLennan, chair of the OIM panel, said:
The OIM’s first report is an important step in the OIM’s mission
to support the effective operation of the UK internal market.
Throughout the process of our review, we have held positive,
engaging conversations with a range of businesses, consumers and
governments to inform our work.
We stand ready to provide expert, independent advice to the 4
governments in the UK to assess the impact of any proposals they
may put forward that could affect trade between the 4 nations of
the UK.
For more information, visit the OIM website.
Notes to editor
- The OIM was launched in September 2021 to provide, among
other things, non-binding technical and economic advice to all 4
governments in the UK on the effect on the UK Internal Market of
specific regulatory provisions that they introduce. The OIM
operates independently of all 4 governments.
- Since leaving the EU, significant powers have returned to the
4 governments in the UK, increasing the possibility of regulatory
differences between the nations. Under the UK Internal Market Act
2020 (‘the Act’), the OIM’s work assists governments in
understanding how effectively companies are able to sell their
products and services across the 4 nations in the UK and the
impact of regulatory provisions on this for the governments’
consideration alongside their own wider policy issues.
- This request to the OIM by the UK Government (through the
Secretary of State for Environment, Food and Rural Affairs), on
its proposal to end the sale of peat in horticultural products,
was made under section 34(1) of the Act, which provides that the
OIM may at the request of a relevant national authority (or 2 or
more acting jointly) give advice or provide a report on a
proposed regulatory provision of the requesting relevant national
authority. A ‘relevant national authority’ means the Secretary of
State, the Scottish Ministers, the Welsh Ministers and a Northern
Ireland Department.
