At the 3rd BRICS+ Digital Competition Forum—featuring Brazil, Russia, India, China, South Africa, and partners like Egypt, Iran, the UAE, and Ethiopia—antitrust authorities took a firm stance against monopolistic practices in the digitalized food sector. The BRICS Competition Law and Policy Centre unveiled a groundbreaking approach to regulating food markets in the era of digital transformation, emphasizing the need for stricter oversight. Among the key targets: the blockchain-powered agribusiness platform Covantis.
Covantis, established by agro-giants ADM, Bunge, Cargill, Louis Dreyfus, COFCO, and Viterra, has rapidly gained dominance in global grain trade by digitizing the supply chain from contracts to shipping. However, its structure enables the platform to bypass traditional antitrust scrutiny, raising alarms about market monopolization. For instance, 76% of Brazil’s grain exports, 53% of U.S. exports, 34% of Canada’s, and 51% of Argentina’s pass through Covantis. The platform’s exclusion of local players and its ability to gather sensitive commercial data from farmers and traders exacerbate concerns over competition and food security.
Alexey Ivanov, Director of the BRICS Competition Law and Policy Centre, warned that digitalization amplifies the power of global corporations, creating an urgent need for regulatory frameworks tailored to the new landscape. “Global food prices have reached the highest level in the last year and a half. Virtually all BRICS countries are currently undergoing antitrust investigations into the egg and chicken meat markets. Competitive agencies must take a new approach to regulating the food industry, not just by jointly analysing global food chains, but by analysing them taking into account all the implications of digitalization. This is the only way we will be able to tackle food security, which is particularly acute for the BRICS and partner countries. For example, the Covantis platform can be used by traders to share confidential information and vertical pressure on farmers. And of course the exclusionary behaviour of Covantis towards local players is of utmost importance. This should be the focus of attention of our countries' competition authorities” Ivanov noted.
He urged BRICS regulators to prioritize tackling digital monopolies like Covantis, especially as food prices soar. Many BRICS nations are already probing anticompetitive behavior in domestic food markets, including egg and poultry sectors. Ivanov argued for collaborative analyses of global food chains that integrate the role of digital platforms to address food security challenges.
To counterbalance such monopolization, the BRICS framework proposes new solutions, including establishing representative price indices and exchange benchmarks based on actual transactions. These measures aim to reduce unproductive intermediaries, ensure fair market participation, and stabilize global commodity markets.
By promoting fair trade practices and addressing power imbalances, BRICS countries seek to protect the interests of small, medium, and large enterprises alike, fostering a more equitable and resilient global food system.
The development of a derivatives market based on reliable exchange and OTC cash commodity prices will create opportunities for BRICS economies to manage risks and pool resources, lead to positive consequences for business and society, strengthen cooperation and stimulate economic growth. Targeted subsidies and exchange mechanism will improve fiscal policy and infrastructure development.
Earlier this year, BRICS Competition Law and Policy Centre (BRICS Center) with the leadership of the Competition Policy and Assessment Center of the State Administration of Market signed a memorandum on long-term cooperation announced the launch and development of the Russian-Chinese exchange and trade platform in consumer goods and commodities which will become a basis for the further development of the universal exchange platform for all BRICS member-countries.
“If entrepreneurs of Russia and China work directly, through modern exchange mechanisms, which will not only allow to establish direct long-term ties, but also reduce prices for goods for end consumers, as it will eliminate the use of intermediary schemes. The task of experts and researchers in this regard is to develop a system of organizational, legal and economic measures and analyze the necessary conditions for the creation of exchange platforms and the development of exchange trade, including in the BRICS format” – Fu Hongwei, Director, Competition Policy and Assessment Center, SAMR; explained.
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