Parliament looks set to ignore advice from supermarkets by allowing products linked to deforestation into the supply chain.
A failed House of Lords amendment to the environment bill on Wednesday means deforestation will only be deemed illegal under the laws of the producing country.
However, grocers including Marks & Spencer and Tesco – which has been accused of turning a blind eye to deforestation itself – want to widen this definition.
The bill will now return to the House of Commons for a vote.
Retail Soy Group representative Will Schreiber said the law was “not good enough to deal with the problem.”
“The government has effectively watered down its ambitions,” he told the Financial Times.
In a letter to the government, grocers argued that “restricting action to illegal deforestation… would not achieve halting the loss of these natural ecosystems.”
They pointed out that foreign governments “have discretion to decide what is legal” and that local land titles are “unreliable or absent”.
The WWF believes the bill means 2.1 million hectares, an area roughly the size of Wales, could be destroyed.
The Department for Environment, Food and Rural Affairs said it was “committed to improving the sustainability of our supply chains and protecting forests”.
British supermarkets have also been criticised for their stance on deforestation, with Greenpeace accusing Tesco of making deals with “forest destroyers”.
The Big 4 grocer uses JBS, a company repeatedly linked to illegally deforesting the Amazon, as a meat supplier.