Stop overregulation blocking retailers delivering value for consumers

(content provided by EuroCommerce) In an initial response to the Commission Communication: A European retail sector fit for the 21st century, published today, EuroCommerce approves of the Commission’s stance against overregulation.

Restrictions need to be addressed

EuroCommerce Director General Christian Verschueren commented: “We commend the Commission on its thorough work over recent years on one of the most important sectors of the European economy. It is excellent that the Commission has confirmed that overregulating retail works directly against the interests of consumers. As a sector considerably exposed to excessive, inappropriate, and sometimes discriminatory regulation in a number of countries, this is a message we have been pressing for many years. Retail is undergoing disruptive and massive change through digitalisation and changing consumer behaviour, and Member States need to look at how they can allow retailers, big and small, to deliver the service and value that consumers expect and deserve. The single market, both for goods and for services, still needs to work better for retail – and consumers: everyone in Europe stands to gain from this.”

The Communication on retail barriers released today is an important step in creating better understanding and recognition of the significant contribution retail makes to the European economy and European consumers. It shows the cumulative negative impact of national and local decisions in creating establishment and operational hurdles which the sector has to face in a challenging and rapidly-changing business environment. It underlines the importance of national and local authorities acting to meet the needs of retail, and thinking hard about the measures they impose on the sector, and creating a level playing field for all business models. A competitive retail sector needs more competition, rather than legal and regulatory barriers reducing it: rules should be simple, transparent and leave room for flexibility and innovation. In addition, the Commission rightly points to the positive spill-over effect the right policy decisions will have on other business sectors.

Addressing territorial supply restrictions: the Commission confirms the detrimental impact on the internal market when retailers are blocked by large manufacturers from choosing where to buy branded goods, and from creating economies of scale by centralising distribution of goods within their network of stores in different countries. These are economies which manufacturers can enjoy themselves and systematically exploit in fragmenting the market. This is not what the single market should be about, and causes real problems where consumers in some countries perceive that they are being given a worse deal than others in the quality or price of what they buy.

SME retailers need help with digital transformation: The guidance for local authorities to help small shops through the digital transformation is a welcome useful tool for the many very small companies who will need to reinvent themselves in the digital environment. We support this, but would also ask for EU funding through, for example, COSME, to help this process. SMEs need this help to have access to the expertise and resources to innovate and compete in serving their customers. To help them in this transition, taxation should be adapted to the reality of online sales growing in many countries by some 20% annually, and a need to reflect this in creating a level playing field for all forms of sales channels.

Protectionism: The past decade has seen a flood tide of protectionism sweep over Europe, especially in Central and Eastern European countries. Discriminatory legislation makes it difficult to sell food from other EU countries, foreign players face higher taxation, more inspections and higher fines than local competitors. B2B relationships are overregulated, and the Rule of Law is undermined, with the risk of jeopardising foreign investments and the integrity of the internal market. The Commission has acted on a number of these illegal measures, but we would welcome them being equipped better in their efforts to defend the internal market, maximise consumer choice and reasonable prices for everyone.

European Semester: EuroCommerce supports use of the European Semester to influence national decisions, but more is needed to ensure proportionate retail policies across Europe: stronger enforcement of EU law, and prevention of infringements in the first place, through, for example the Commission proposal for a services notification procedure.

Concluding, Verschueren said: “Retail is a key contributor to the EU economy in terms of GDP and employment. Equally important, it is the direct, daily interface for 500 million Europeans to have access to the food and other products they need to live. Yet this is still poorly understood and hit by regulation which directly harms consumers, and often benefits no one. Regulation needs to provide the basis for companies of all sizes and business models to deliver these important public goods, in a fair and competitive way. We ask the Commission to maintain the political momentum of this important communication, and the Member States to deliver on its recommendations.”