Online retailers can get around supply restrictions by international brand manufacturers by translating product information in their webshops. Picnic uses this to offer German products cheaper in the Netherlands.
“On travel for the best price”
That products from international brands such as Hak, Coca-Cola, Nutella or Pringles are significantly cheaper in Germany than in the Netherlands has long been a thorn in the side of Picnic co-founder Joris Beckers. A good fortnight ago, he announced that the online supermarket, which also operates in Germany and France, would start buying some well-known brands abroad, even though manufacturers are trying to prevent it. “We are just going to try,” he declared.
He has kept his word: Picnic’s Dutch customers can now specify that they want products labelled ‘On travel for the best price’. Those products Picnic buys cheaper on the German market. Because the packaging is monolingual German, physical supermarkets are not allowed to sell them in the Netherlands under Food Safety Authority rules. But online retailers can get around that rule: after all, in the app Picnic can translate the product information.
“Outrageous price differences”
Single-language packaging is one way for international brand manufacturers to prevent retailers from buying cross-border. “Territorial supply constraints”, this is called. That practice goes against the principles of the European single market and costs consumers 14 billion euros a year, according to a European Commission estimate. Manufacturers, however, say the price differences are due to differences in local legislation on ingredients, labelling, packaging and recycling.
But retailers’ patience is gradually running out: “We find it really scandalous that the price differences are so big,” Beckers told RTL Nieuws. “The big brands are taking advantage of the European market. For example, there is only one Magnum factory in the whole of Europe, which is in Italy. So there is also only one cost for an ice cream. And yet we pay different prices.” A pack of Magnum costs 3.73 euros in Germany and 5.22 euros in the Netherlands, says Picnic. The price difference for a litre of Coca-Cola is also large: 1.08 euros in Germany, compared to 1.83 euros in the Netherlands.
Update 27 January: according to the Dutch Food and Consumer Product Safety Authority (NVWA), the labelling requirements apply to both the webshop and the packaging, and Picnic does violate the rules. Nevertheless, Muller does not want to stop the action just yet: “We are not looking for a fight with the NVWA. What we are looking for is to give Dutch consumers a fair deal. This is perhaps an opportunity to take a look at that.”
