“Directive unfair trade practices will raise prices for consumers"

A European directive on unfair trade practices, originally intended to protect farmers and small enterprises, is threatening to overshoot the mark and raise prices for consumers.

Fewer choices, higher prices

Several retail organisations are seriously concerned about the new directive, which was originally intended to protect smaller farmers and manufacturers in their negotiations with major retailers. Those retailers would no longer be allowed to cancel orders at the last minute, to alter contracts unilaterally or retroactively, or to let suppliers bear the burden for spoiled products.

The Agricultural Board decided to expand the reach of this measure to include companies with up to 300 million euros of turnover (and later even 350 million), which goes too far for the retail industry. “How many family businesses have a turnover of 300 million euros? This is a coup intended to regulate transactions with very profitable manufacturers,” says Christian Verschueren from EuroCommerce. He is worried about the consequences, especially for consumers. In smaller EU member states the directive would be protecting major multinationals as well.

That could in turn lead to prices being raised severely in the affected countries, confirms Dominique Michel from the Belgian trade federation Comeos. “Soon we will no longer be able to ask those multinationals for the usual listing fee (a fee for placing their products on the shelves). Or we will not be able to ask major manufacturers to take back a new product if it sells poorly,” he says in De Standaard. The European consumer organisation BEUC feels the same way: “There is a serious risk that consumers will have fewer choices and will have to pay higher prices. This proposition is disadvantageous for consumers,” claims general director Monique Goyens in a letter to the members of the European Parliament.