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EuroCommerce Director-General Christian Verschueren commented on the release today of the European Commission draft regulation on standards for transparent business relations between platforms and their business users:

“Online platforms are drivers of growth and innovation, enabling businesses and consumers to make the most of the opportunities provided by the digital economy. They are very often the easiest first step for small businesses who want to go online and benefit from exposure to a wider customer base without having to make a large investment in digital infrastructure. Any regulation on platforms therefore needs to be carefully balanced to encourage small merchants to go online with confidence of fair treatment, while avoiding unnecessary overregulation.“

We believe that the proposed regulation strikes a good balance between addressing some transparency issues and a key principle in B2B relations, freedom of contract. The underlying approach of this regulation is sensible, laying down the need for transparency in terms and conditions and changes in them, suspension and termination of business users, ranking, and access to data, but not being unnecessarily prescriptive about what those terms and conditions should be. The regulation covers very different types of platforms, from e-commerce marketplaces to online search engines. Since these can be very different, issues specific to the various forms of platform can be best covered by the codes of conduct, which we are happy to see are encouraged.  We are also pleased that the Commission has chosen a Regulation laying down the same rules and expectations for platforms and business users across Europe, thus avoiding a proliferation of additional rules imposed by Member States.

The proposal rightly puts emphasis on internal dispute resolution and mediation rather than litigation. Experience from the Supply Chain Initiative in establishing a similar mechanism has shown that this works, and it is encouraging that the same approach has been taken in relation to platforms. We will want to see the provisions for collective action being consistent with the recent proposal under the New Deal for Consumers. While we know that the latter serves a different purpose in terms of collective interests of consumers, in both we will be pressing for sufficient safeguards against frivolous litigation. Associations representing business users in any collective action under the platforms proposal should be able to demonstrate solid legal standing and credibility.

~ENDS~

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu

EuroCommerce Director-General Christian Verschueren commented on the release today of the European Commission Communication on Artificial Intelligence (AI):

“Digital technology is changing how we live and consume goods and services. Artificial Intelligence will be a powerful tool in driving this forward into new areas, and creates huge potential for the development of the world economy. It will also raise profound policy questions. We support the Commission in taking a lead in identifying and highlighting the key issues and challenges of AI, many impacts of which are at this stage impossible to predict. We support its careful approach to examining these important implications.” 

AI is already having a fundamental impact on retail and wholesale. Some retailers have developed breakthrough innovative products that use machine learning and transform the way consumers browse, shop and engage online. In the future, AI will be crucial to better understanding customers’ needs, creating services that they want and making online and offline sales even more seamless. AI will also revolutionise inventory and supply chain management, logistics and delivery, payments and many other processes. The possibilities are endless, and this is just a beginning. The Commission should look to promote the responsible development of new products and services without stifling innovation, and consider whether any changes are needed to current rules on product safety and contractual and non-contractual liability.  

Verschueren added that the new technology would require new skill sets, and have a major impact on, particularly, lower-skilled jobs in retail and wholesale:

“AI will significantly transform the job market, rendering some jobs obsolete, but creating others in developing new products and services that have not existed before. In facing these changes, access to a strong supply of digital skills will be crucial, but also a real challenge”.

~ENDS~

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu

The EU-Mexico Global Agreement concluded in principle at the weekend marked another important and welcome step in Europe’s leadership in advocating free trade. EuroCommerce Director-General Christian Verschueren said:

“The agreement reached between the EU and Mexico on an updated trade deal shows how EU trade policy can deliver real results, and how building bridges is better than building walls. This is a message I hope will also be heard in Washington ahead of negotiations on the update of NAFTA.”

The abolition of most tariffs under this agreement will help our members offer customers more choice on a range of products, and it contains very helpful and trend-setting provisions on e-commerce and online sales, which we hope to see included in many future trade agreements.

Verschueren called on the EU and Mexico to resolve remaining technical issues as quickly as possible in order to launch the ratification process:

“Companies and consumers cannot benefit from even the best trade agreement if it is bogged down in lengthy translation and ratification procedures. Time is precious, considering we are approaching the end of this legislative period, and we hope that all those involved will keep the momentum to allow the agreement to enter into force soon.”

~ENDS~

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu

Speaking today on the vote in the European Parliament on the EU Organic Production Regulation, EuroCommerce Director-General Christian Verschueren warned that the text agreed left some difficult questions unanswered while potentially hindering EU organic products reaching the consumer:

“Despite what some people have said, consumer confidence in organic foods and demand for them has increased significantly, with sales continuing to boom – growing 12% and reaching over 30 billion euros. Retailers already struggle to source sufficient supplies of quality organic produce to meet consumers’ demand.  We are glad that there is finally agreement on a text, but worry that it only answers part of the question and imposes controls on retailers and wholesalers which will deter, rather than increase the offer of organic produce, while doing little to improve public confidence.”

Retailers and wholesalers have responded to increasing consumer demand by offering a growing range of organic produce and developing specific organic product lines, encouraging and rewarding farmers and SMEs producing quality organic food. We have developed quality supply schemes to provide transparency to consumers and drive the organic market. Growth of the organic sector, was 12% in the last year recorded¹, and EuroCommerce has called for regulation of organic products which lays down proper standards, but does not impose additional burdens which can throttle the supply and sale of organic produce.  

We are pleased to see that the agreed text allows for mixed farming, combining conventional and organics production, if sufficiently separated. While the key issue on thresholds for pesticide residues remains fragile, we support the approach agreed to first conduct further investigations before a product or crop loses its organic status, instead of automatically decertifying a crop which was unintentionally contaminated.  

We are fully in favour of measures to prevent fraud and ensure that customers are getting what they pay for and expect. The additional controls on retail and wholesale will not, however, achieve this: most retailers sell products that are already packed and labelled, and the risk of non-compliance with organic rules at that stage of the chain is negligible. These additional controls risk stopping some, particularly small, retailers from selling organic produce altogether. We therefore ask that authorities adopt a risk-based approach, and conduct inspections at the stage where there is most risk of fraud. 

_{1. Annual growth in 2016 (EU28): 12 %; 30.7 billion Euro retail sales}

_{Source: http://www.ifoam-eu.org/en/organic-europe}

~ENDS~

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu

In an initial response to the Commission Communication: A European retail sector fit for the 21^st century, published today, 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, Christian 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.”

~ENDS~

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu

Speaking today as the European Parliament votes on the Directive for Energy Performance of Buildings (EPBD), EuroCommerce Director-General Christian Verschueren pressed MEPs to keep to the compromise reached on charging stations for electric vehicles:

“We very much hope that the European Parliament will vote to adopt what is now a practicable compromise on charging stations. Our leading retailers have already been active in providing recharging points for electric cars, and are ready to invest to meet the real needs of customers in the electrification of mobility.”

The provisional agreement includes a requirement that, for new and major renovated buildings with more than 10 parking spaces, at least one charging station has to be installed and 20% of the parking lots have to be pre-ducted. Retailers have welcomed the exemption of SMEs and of already planned construction work.

This requirement will enter into force in late 2019 or early 2020. Another provision requires Member States from 2025 to lay down rules for a minimum number of charging stations in all existing non-residential buildings with more than 20 parking spaces. This approach, which we support, allows Member States to decide how to address this rapidly evolving field in the most appropriate way with fit-for-purpose rules.

~ENDS~

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu

Speaking today on the launch of the Commission’s New Deal for Consumers, EuroCommerce Director-General Christian Verschueren commented on a number of aspects of the proposed package, particularly concerning doorstep selling, alleged dual quality products and collective redress:

“Retailers rely on consumers coming back to their shops, and we have always believed in consumers being given protection and fair treatment. It is positive that the scope of the proposals reflects the fact that no major changes are needed to consumer protection and for large parts the Commission is clarifying the existing rules. However, I am disappointed that the Commission is proposing measures at EU level to address problems present in only a few countries, resulting from poor enforcement rather than lack of legislation.”

While EU legislation already bans aggressive commercial practices for all sales channels, these proposals will allow Member States to ban unsolicited selling of goods on the doorstep. It is helpful that some clarification has been included to limit the ban to unsolicited, aggressive or misleading marketing practices, but it is nevertheless disappointing to see such provisions, which are neither proportionate, nor factually justified, included in the final legislative proposal. We are concerned that the proposed changes could lead to Member States banning legitimate sales channels.

Recent discussion on alleged dual quality of food products has undermined consumer trust. There is not enough information available yet on the scale of the problem. Therefore, the Commission should have awaited the results of the EU-wide testing campaign later this year before proposing any EU legislation that will affect all products. This proposal puts retailers at risk of heavy fines for selling goods in one country with different ingredients from those in another. Retailers are obliged by big brands to buy products from their local distributor, and are barred from sourcing from another territory.

On collective redress, allowing legal action in the absence of a consumer mandate could end up, as in the US, with lawyers making money and consumers seeing none of it – while indirectly paying for this with higher prices. We are absolutely clear that, where consumers have sustained damage, they should have access to proper remedies. However, it is vital that the proposal includes effective safeguards against abusive litigation. Consumer redress focusing on dispute resolution between the consumers affected and the businesses concerned, and with safeguards for both sides against abuse, is a fairer and more effective way of safeguarding consumers.

Verschueren added: “Member States have different approaches to penalties and can have very effective enforcement systems even without imposing the fines. Therefore, we are not convinced that setting fines of up to 4% of their turnover will improve compliance or eliminate rogue traders or unfair B2C practices.”

~ENDS~

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu

A proposal which won’t harmonise anything – and will harm countries where the supply chain works well

Commenting on the European Commission’s draft legislation banning or restricting a number of practices between operators in the food supply chain, Christian Verschueren, Director-General of EuroCommerce said that EU legislation will do nothing to help the overall situation of farmers or create a level playing field in Europe:

“We are not convinced that a ‘minimum harmonisation’ approach is the right instrument to deliver the level playing field which the Commission wants to achieve. The Commission has not produced any evidence of a structural problem or of the utility of EU legislation in resolving it.”

There is already extensive legislation in most Member States, and EU legislation aiming to provide a minimum set of principles will not deliver more than Members States’ existing frameworks. Moreover, it allows Member States to go a lot further in intervening in the market, and will impose unnecessary regulation in countries where dialogue and better organisation of farmers have led to a well-functioning food supply chain without specific legislation.

The proposal goes against creating the positive relationships and trust needed for a better-functioning supply chain. On the contrary, it favours adversarial enforcement and sanctions, which in some countries have already spilled over into discriminatory action and disproportionate fines incompatible with EU law. The directive also introduces an arbitrary culture of name and shame with no right of response or defence.

We would have wished that the Commission had acknowledged and built upon the major progress, achievements and values of the Supply Chain Initiative in encouraging positive resolution of disputes through mediation and dialogue, producing quicker and better results for all players.

There are better ways to help farmers than political gestures

Like the Commission, retailers and wholesalers are keen to help farmers create a competitive food supply chain. But in responding to political pressure from the European Parliament and a number of Member States, the Commission has ignored much better ways of addressing the real problems facing farmers. Christian Verschueren commented:

“Political gestures don’t make for good or ‘better regulation’. This directive won’t do anything to help farmers. The problems farmers face are best addressed by helping them organise themselves better through e.g. producer organisations and cooperatives, encouraging the use of risk management tools, and aligning what they produce better with what consumers want. There is also a need for better understanding of value transmission in the supply chain.”

Legislation that carries major risks

Christian Verschueren warned that the Commission draft legislation exposed the market - and consumers - to a number of major risks in the course of its negotiation:

“The Commission has opted for legislation to deal with issues which can be much better resolved by market operators through mediation and positive dialogue at national or local level, for example in national platforms and interbranch organisations. We therefore call upon the Parliament and the Council to resist making this a Christmas tree of additional, unnecessary and intrusive provisions or broadening the scope of the directive beyond farmers and SME suppliers.”

~ENDS~

Notes to editors

In light of the risks of this proposal running out of control in its passage through the institutions, EuroCommerce will be asking the Council and European Parliament in examining this proposal to:

• ensure that this directive focuses on helping small operators dealing with large operators; and avoid it further restricting the ability of retailers to negotiate with large manufacturers, whose net margins of 15-30% contrast with the 1-3% achieved by retailers. It will be consumers who end up paying for such an outcome, with no guarantee that farmers see any of the additional profits;
• consider whether further intrusion into the principle of freedom of contract and the workings of the market is really justified at EU level; and ensure that the list of practices covered remains limited and relevant to the players it seeks to help;
• ensure that the list of practices covered remains limited, and provides the necessary legal certainty for operators, with clear definitions and provisions to avoid wide interpretation and the abuse already experienced in a number of Member States;
• ensure that when transposing and enforcing the directive, Member States respect the principles of free movement of goods, services and establishment in the Single Market; this means that any implementing provisions need to be non-discriminatory and proportionate;
• introduce provisions in the proposal for mediation and dialogue at national level; and
• include mechanisms to ensure a proper right of response and defence for operators.

The Annex provides a fuller set of facts and figures about the agri-food supply chain and retail.

For more information about examples of good practice by retailers in their dealings with farmers and small suppliers, see our website here, and follow us on Twitter #retailers4farmers.

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu

1. If we want to achieve a truly EU single market for goods, this Commission proposal could make a difference. It improves and clarifies the procedure for the application of the principle of mutual recognition. It set outs the obligations and rights of competent authorities and economic operators. This proposal depends on Member States willingness to embrace mutual recognition and the Commission’s efforts to enforce one of the key principles within the single market for goods.

2. The free movement of goods is a right based on explicit Treaty obligations with a direct effect on Member States. Mutual recognition for goods in non-harmonised areas is derived from the Treaty and has been clearly defined since 1979. The burden of proof to deny that right falls on Member States and businesses should not have to argue each time for that right to be applied.

3. One of the core problems is the excessive use by Member States of often vaguely defined overriding reasons of public interest to introduce national rules that restrict the free movement of goods. On average annually 700 draft rules are notified to TRIS1 that potentially fragment the single market further and not all rules are notified. Many of these rules are unnecessary, as it is difficult to defend that in all these cases there is a unique situation in a specific Member State that requires a higher level of regulation than elsewhere in the EU.

4. If Member States do not comply with the procedures for an administrative decision set out in the proposed Mutual Recognition Regulation, their decision should be rendered inapplicable by default or at least be suspended until all conditions are met to increase legal certainty for businesses. Member States should clearly justify and motivate administrative decisions, and test reports from accredited conformity assessment bodies should always be accepted.

5. The Mutual Recognition Declaration could be an appropriate tool for businesses to prove a product is already lawfully marketed in another Member State. It will only work when competent authorities accept the declaration without further questioning. A number of issues needs to be further clarified, especially language and evidence required

6. SOLVIT has a high potential as an informal problem-solving tool. Currently, SOLVIT centres do not live up to expectations due to a lack of resources, expertise and staff. Member States need to enable a proper dialogue to solve problems and make the single market a success. EuroCommerce supports a more prominent role for SOLVIT, but the deadlines set out in the Commission SOLVIT Recommendations of 2013 should be respected as the maximum duration to handle a case, or deadlines set out in national appeal and court procedures. This is including the opinion which should also be further strengthened and clarified.

7. Product Contact Points could be the contact points for retail and wholesale businesses about products. Having one contact point for all products in every Member State will increase trust of especially SMEs to trade cross-border. EuroCommerce fully supports to proposals to improve the functioning of Product Contact Points in the Member States.

Speaking today at the International City Retail Experience 2018 in Hoogeveen, the Netherlands, EuroCommerce Director-General Christian Verschueren described the major trends affecting Europe’s city and town centres, and how retailers play an important role in keeping city and town centres attractive places for everyone:

“The wellbeing of retail and city centres are very closely linked. Changing consumer behaviour, aging consumers and digital technology are making retailers work to reinvent themselves. This presents real challenges to the smaller shops which often make up a large part of the city centre landscape. Thriving shops keep city and town centres attractive places for citizens to visit and for retailers and other to do business in. This can only happen by local authorities and business working together, and helping smaller shops extend and modernise their business by going online.”

The retail and wholesale sector makes a massive contribution to the local economy, and to the EU economy as a whole. It is the largest private sector employer, and a highly productive and adaptable sector. Small retailers and wholesalers can make a real difference in driving innovation to meet ever-changing consumer demand, and are an essential part of the city landscape, bringing variety, colour and life to the centre of towns.

Shops in cities and towns need support in going digital, and close cooperation with local authorities. We need cities and regions to work together with all stakeholders to draw up forward-looking plans to keep people coming into town and shop, eat and seek entertainment. The Dutch Retail Agenda is an excellent example of such collaboration and a model we would recommend other regions and towns to look at carefully.

~ENDS~

For further information, please contact:

Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu