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EuroCommerce Director-General expressed support for the conclusions in the Commission report on the working of the Geoblocking regulation issued yesterday:

“We are pleased that the Commission has decided to leave the Geoblocking Directive unchanged until their next review in 2022. We fully support the creation of a single market for e-commerce, and call on the relevant parts of the Commission to look at the major differences in member states’ consumer rules, and risk of exposure to legal action in an unfamiliar jurisdiction. Both act as a powerful disincentive to e-traders actively expanding cross-border.”

The Geoblocking regulation adopted 2 years ago obliged online traders to sell to any consumer regardless of their location, but, due to problems relating to the Rome and Brussels regulations, did not oblige traders to deliver outside their own jurisdiction. The Commission decision to wait another 2 years before looking to revise the Geoblocking regulation makes sense, and retailers and wholesalers welcome the conclusion in the report not to change the provisions related to delivery.

The Rome and Brussels regulations allow consumers to pursue legal action against a trader in another jurisdiction and have that judgment apply in the trader’s country. We and other traders pointed out at the time that an obligation to deliver to the home country of the consumer would expose a trader to the provisions of Rome and Brussels regulations. This would mean that a trader selling a relatively inexpensive item could end up paying many thousands of euros defending a case against them in a jurisdiction whose laws they are unfamiliar with. The Commission concluded that the trader could choose not to deliver outside the countries he actively served, so that the transaction would remain under the trader’s legal framework.

This of course means that the consumer has to find his or her own means to get the product delivered to their home – indeed any help in doing so from the trader would, under the regulation, expose the trader again to action in a foreign jurisdiction, and a multiplicity of different consumer rules. This is not ideal for the consumer, and we very much share the Commission’s wish for a vibrant single market in e-commerce.

We hope that the Commission services responsible for the consumer law might look again at harmonising consumer rights across Europe and reconsider whether a trader delivering a product or service across border cannot be treated in the same way as a shopkeeper who sells a product to a foreign visitor – with the trader’s law being applied. E-commerce is growing rapidly, and the present consumer rules hold back, particularly smaller European traders - and consumers - from taking full benefit of the single market.

EuroCommerce supports the direction set in the European Green Deal. Retailers and wholesalers understand that challenges are significant and are in many ways pioneering by providing consumers with sustainable choices at an affordable price, and developing sustainable business practices, such as recyclable packaging1, CO2 neutral stores and investing in electrical delivery fleets. They do however also face challenges in driving this transition in a sector with high fixed costs and low margins and realise that the challenge is such that they need to cooperate with peers, suppliers and other stakeholders to have a real impact.

Companies need legal certainty, clear incentives, and scale to invest in a fundamental business transformation with a long payback such as those needed under the Green Deal. They need public support to facilitate the transition and invest in new technology, to support investment in infrastructure and to promote research in greener technologies.

Competition policy is already supporting the green transition, by helping to achieve effective and competitive outcomes for consumers and by ensuring that companies compete on sustainability aspects. Nevertheless, there is scope for more clarity to allow further cooperation with peers and supply chain partners, help address the first mover disadvantage, facilitate the transition in a competitive environment and offer consumers a wider choice of sustainable options. We thank the Commission for the opportunity to comment on how competition policy can support sustainability efforts in the most effective way.

Our response focuses first on questions relative to antitrust rules. We will then comment on the other aspects of the consultation, namely state aid control and mergers.

EuroCommerce Director-General Christian Verschueren spoke today on the publication of the Commission draft Data Governance Act, which promotes data sharing and a common European Data space:

“All sectors and ecosystems rely heavily on data, and the ability to share it safely. Our sector has acted to embrace the opportunities of the data economy to meet ever-changing consumer demands and to help us grow our businesses. The COVID crisis has accelerated the already rapid digitalisation of retail and wholesale.”

The European data economy is set to be worth more than €1,000 billion in 5 years’ time and will be a major driver of the economic growth and global competitiveness Europe needs in the coming years to overcome the crisis.

The data economy helps our sector to foster innovation and improve services to consumers and business customers. We believe in the need to encourage international data flows with trusted partners that meet the safety, privacy and security requirements Europe’s citizens expect. Now, more than ever, international cooperation and data sharing will be needed to spur recovery.

That is why we are pressing for a framework for European-based, data driven eco-systems which can compete globally. Common European Data Spaces must provide legal certainty, secure privacy and cybersecurity, and competition safeguards. Much of this can be achieved with proper implementation of existing regulation, and promoting, within competition rules and protecting IP rights, cross-sectoral data sharing between different data spaces. This is a priority for a sector like ours which depends on a wide range of suppliers and is at the centre of many ecosystems.

Mandatory data sharing should only be a last resort in case of market failure; voluntary sharing should be the norm, and will be core to building a stronger data economy. But this needs trust among players and a secure, safe, and trustworthy environment for data sharing.

Verschueren added:

“Europe is lagging behind competitors in the US and in Asia in data. To bridge this gap, we need an approach which builds trusted European data spaces and strong European competitors. But this means striking a balance between keeping European data secure without closing off to European enterprises the scope for innovating, competing and growing on the international stage”.

Speaking today on the publication of a study by the European Commission on supply restrictions imposed by manufacturers which prevent retailers buying products in one country and selling them in another, EuroCommerce Director-General Christian Verschueren said:

“The study shows that consumers could save some € 14bn on their food bills if retailers were not constrained by these restrictions, known as Territorial Supply Constraints (TSCs). We are grateful to the Commission for having carried out this independent investigation. It sets out the facts and provides empirical evidence that TSCs are a widespread practice. It is now time for the Single Market to work for consumers in this area, and to put a hard stop to these restrictions which prevent retailers providing their customers with the full range of branded goods at the best price.”

TSCs are restrictions imposed by manufacturers that make it impossible for retailers to choose where to source products. While manufacturers can source inputs globally and focus production on a limited number of sites, retailers have no choice but to accept the manufacturer’s conditions preventing them from sourcing in one country and selling in another, forcing them to use only the manufacturers’ designated national distributor. These large manufacturers supply essential must-have products which consumers expect to find in a shop, and which retailers therefore have to stock. These are one of the main reasons why consumers pay significantly different prices across Europe for the same branded goods, with no other justification.

The study finds TSCs most prevalent where suppliers have stronger bargaining power and where brand loyalty is higher. Practices fragmenting the single market can take many forms, such as refusal to supply certain products (this was highlighted by 46% of responses), different packaging and language labels (30%), limiting supply to a market chosen by the manufacturer (29%), different recipes (27%) and limiting quantities supplied (24%). As a result, manufacturers can charge significantly different prices across Europe, with little relation to costs of production or distribution. The Commission has recognised the practice. It imposed a fine last year of €200 million on AB InBev for preventing the free circulation of beer from the Netherlands to Belgium. It also mentioned TSCs in their reports on retail and on the single market[1]. Since, typically, 80% of the final retail price of a product is made up of the wholesale cost, and retailers’ net margins are no more than 1-3%, the widely varying wholesale prices resulting from these practices across Europe feed directly into the price to the consumer.

Verschueren added:

“Removing TSCs would enable retailers to choose freely where they source in the Single Market, arrange their own, more efficient, logistics, negotiate better supply conditions, transfer products to their shops in other countries, and access the range their customers want. Consumers, in particular in smaller countries, but also in larger ones, could benefit significantly from the resulting competition, with wider choice and lower prices.”

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EuroCommerce has been an active participant over the years in campaigns on, for example, healthyaging and dangerous substances organised by the European Occupational Safety and Health Agency OSHA.

EuroCommerce has now committed itself to participate in OSHA’s new 2020-2022 “Lighten the Load” campaign, focused on minimising work-related musculoskeletal disorders.

Retailers and wholesalers are committed to ensuring the safety and health of their employees and avoiding them suffering problems from lifting loads and other risks at work. EuroCommerce has therefore pledged to support communication and dissemination activities under this OSHA Healthy Workplaces Campaign. We will discuss with our trade union colleagues in the Social Dialogue Committee on Commerce sharing best practice in the European retail and wholesale sector. The OSHA Campaign website can be accessed here.

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Speaking today on the launch of the Commission New Consumer Agenda, EuroCommerce Director-General Christian Verschueren said:

“The green and digital transition is fully underway, and is being driven in large part by consumers and what they buy. The COVID-19 pandemic has further accelerated the digital transition, making the Commission’s new agenda very timely. Retailers help by providing consumers with ever more ways of making sustainable choices and by asking suppliers for more sustainable, circular, and eco-designed products.”

Retailers need to be able to innovate and respond quickly to changes in consumer behaviour and expectations. To do so, they need a stable and predictable business and policy climate: harmonised rules – and no gold-plating by national governments – , coherent national consumer polices and effective and efficient enforcement across the EU are the best ways of ensuring this.

Legislators need to be careful not to create rigid legal obligations that increase costs and administrative burdens, with only limited benefits. Our experience has shown that sustainability needs to start in the design of the product, making it attractive to consumers. The Ecodesign Directive has already proven its value in promoting better energy consumption, repairability and recyclability, and we believe that the Commission should use this as the primary vehicle for meeting Europe’s sustainability goals. Introducing a ‘right to repair’ may not fundamentally change consumer behaviour, and raises practical questions that have not been resolved yet.

A complete overhaul of the General Product Safety Directive is not necessary. We welcome the Commission’s intention to focus on unsafe products from third countries entering the EU market. Effective enforcement, harmonised interpretation and implementation of the directive will be the most effective means of tackling dangerous products and keeping EU consumers safe. It is also important to decrease the number of tests and analyses a distributor or importer is asked to perform. Competent authorities need to act more effectively against rogue manufacturers and traders and stem the tide of non-compliant or dangerous products from outside the EU, irrespective of their origin or trading channel. Verschueren added:

“As Vice President Jourova and Commissioner Reynders said, consumers will be crucial for the economic recovery. But instead of revising the Unfair Commercial Practices Directive again, its better implementation and enforcement will be key to protecting consumers and building trust.”

Speaking on the publication of the European Commission proposal on a ‘single window’ for customs today, EuroCommerce Director-General Christian Verschueren commented:

“Together with digitalisation of customs procedures, the Single Window will be a major help to businesses trading cross-border to reduce compliance costs and speed up customs processing. With business suffering under COVID, this is a very welcome step towards modernising customs and reducing regulatory burdens”.   

The Commission proposal will eventually enable economic operators to electronically lodge all the information required by customs and non-customs legislation for EU cross-border movements of goods through a single portal. The Commission has recognised the importance of better exchange of information and an improved risk assessment in its Customs Union Action Plan. This should help ensure that goods entering the EU are correctly imported and safe, and that fraud on products imported from third countries (customs duties and VAT) is significantly reduced. In this context, retailers and wholesalers attach very great importance to the proper implementation of the VAT e-commerce package on 1 July 2021 (already delayed from 1 January 2021 because of COVID-19), as agreed unanimously by all Member States.

Verschueren stressed  that efficient and modern customs procedures as playing a central role in improving the competitiveness of European businesses of all sizes:

“Bureaucratic burdens at the border weigh heavily on importers and exporters. Simpler, consistently applied customs processing will have a direct impact on trading costs, and we will be engaging fully in dialogue with the Commission on their very welcome Customs Action Plan.”

Reacting today to the Commission draft directive on EU rules for setting minimum wages, EuroCommerce Director-General Christian Verschueren said:

“Retailers and wholesalers value their employees highly, and always seek to properly reward their hard work.  This hard work was clearly demonstrated during the height of the COVID crisis in maintaining reliable supplies of essentials despite disruption and unprecedented demand. We pay well above the minimum rates on average where countries set these by legislation, and engage positively in collective bargaining where that is the norm.  We therefore see no need, nor the possibility under the Treaty, to set rules on pay and collective bargaining at EU level.”

Retail and wholesale are Europe’s largest private-sector employer, providing 29 million direct jobs, including many opportunities for women and young people. We support proper employee protection and national minimum wages in countries, in accordance with national law and practice.   We believe that wages should be set at the closest possible level to the workplace to adequately respond to the fundamental and rapid changes in our sector, accelerated by the pandemic. How this works and best practice in our sector, see our Policy Guidance on the Future of Work in Retail and Wholesale).

As EU social partner for retail and wholesale, safeguarding the autonomous role of the social partners in collective bargaining at national, sectoral and company level is paramount. We are concerned that the Commission has not taken account of employers’ views, and gone ahead with wage legislation under provisions of Article 153/TFEU on working conditions, when Article 153(5) expressly excludes any action under the Treaty on pay and collective bargaining.

The Commission has recognised our sector as one of the most severely hit by the COVID crisis in the context of the Next Generation EU recovery fund. With many stores, particularly SMEs, facing closures and job losses in the coming months, this is not the time for increasing administrative burdens on shops and businesses fighting for their survival. The impact assessment assumes that SMEs will be able to shift the costs of higher wages onto consumers. This is simply wrong:  with a highly competitive retail market and consumers cutting back on expenditure due to worries about their own jobs, price increases of this sort are not an option. We would ask the Commission to look again at this assumption and consider a further impact assessment to examine the real market conditions at sectoral level into which this proposal will be launched.

The proposed directive also seeks to set intrusive EU targets for adequacy, coverage and variations of minimum wages in member states which seem inconsistent with the statements in the proposal that the rules do not seek to cut across national arrangements for collective bargaining and minimum wages. We believe, however, in  collective bargaining and social dialogue, and would welcome EU action through the EU Semester process and capacity-building to support voluntary initiatives on social partnership and collective bargaining in those countries where this does not exist.  Verschueren added:

“We fear that top-down solutions at EU level may take insufficient account of the present economic situation, may crowd out very positive bottom-up solutions being agreed with social partners at national, sectoral and company level, and undermine trust in systems which are working well. We are very willing to work with the Commission on promoting social partnership throughout Europe, but believe the present proposal is the wrong solution at the wrong time”.

In our joint statement of 8 April, we highlighted the unprecedented impact of the COVID crisis on the viability of retailers and wholesalers and the resilience of their workforce. The tradition of social partnership and the prevalence of tailored working arrangements in our sector, often through collective agreements, have enabled companies to deal effectively with the sudden and radical adaptation to the ‘new normal’. The social partners are now proposing “A European Pact for Commerce” to EU and governmental authorities to help the sector improve its long-term resilience through targeted support measures and by accelerating the digital and green transitions.

A European Pact for Commerce to support Europe’s economic recovery

We congratulate the European Commission and the European Council on agreeing the historic Next Generation EU recovery programme and the Multiannual Financial Framework, which will allow the EU to deliver on an ambitious and far-reaching investment agenda for the coming years.

We welcome the recognition of the retail and wholesale sector as providing an essential service, as an ecosystem hit particularly hard by the COVID crisis, and a priority sector for investment support. We would like to stress the importance of a vibrant retail and wholesale sector to the overall economic recovery, which heavily depends on the recovery of private consumption. Current support measures will therefore continue to be needed as long as demand and confidence are still at very low levels, in order to achieve the twin objective of keeping people in viable employment and stimulating sustainable consumption.

As part of the “European Pact for Commerce”, we emphasise the importance of investment and policy support to increase the resilience of the European retail and wholesale, Europe’s largest employer, and accelerate its digital and green transition. The scale of our sector (10% of EU’s GDP, 1 in 4 companies, 1 in 7 jobs), connecting producers with customers, has a significant impact on the economy as a whole, in particular on other key ecosystems. Consumer confidence remains at an all-time low when workers are uncertain about their future. It is also important to the livelihood of local communities and the encouragement of sustainable consumption. Supporting retail and wholesale in undertaking the green and digital transition can provide an effective fast lane to change.

Funding should be conditional, targeted towards transition projects, easy to access at company level and disbursed quickly. We recognise that member states will be responsible for designing their recovery programmes along the EU’s overarching priorities – digitalisation, sustainability and resilience. Finally, we urge the Commission that EU funding should be made conditional on compliance with EU legislation, rule of law and single market rules, and that implementation of the Country-Specific Recommendations is followed up strongly.

Actions needed for improving resilience and up- and reskilling of staff in retail and wholesale

According to a recent report by the McKinsey Global Institute, COVID and automation combined are putting more than 5 million jobs at risk in retail and wholesale. This could affect the many women and young people employed in retail and wholesale. In addition to stabilising the economy, we need EU and national help to invest in the skill sets of these workers, e.g. through stronger vocational and educational training, individual learning accounts. Targeted up-skilling would enable us to retain a larger portion of our workforce by training them to use digital technologies, while re-skilling may enable others to access job opportunities in other sectors.

Therefore, EU employment and skills support measures need to be redesigned to allow easy and rapid access to funding for the restructuring of our sector and changing skills needs driven by acceleration of market changes driven by COVID.

The social partners in the retail and wholesale sector, representing 5.4 million companies and 29 million workers in total, have therefore the 4 main policy asks to EU and national authorities:

1. Policy ask: The Commission should foster coordination and exchange on VET and life-long learning among member states

The retail and wholesale sector already trains for core employability skills, including interpersonal skills. Retailers and wholesalers now need to equip their workforce with the basic and advanced skills needed to interact with sophisticated systems, using, for example, blockchain and artificial intelligence. A worrying

development in this respect is the current shortage of IT-experts, as labour markets and universities in Europe struggle to meet the rising need of our sector and the economy as a whole. However, education remains primarily a national, regional and local competence, which means that the EU can only add value through the coordination and exchange national and local competent authorities and experts (‘open method of cooperation’), and encouraging best practices.

2. Policy ask: The Commission needs to fund and help SMEs up- and reskill their workforce

When allocating EU funding from ESF+ (European Social Fund) to national programmes, the Commission and national policy-makers should take into account the best practices in training programmes at company level. Training programmes at company level have been tailored to the needs of employees and are teaching basic digital skills. They are essential to the future employability of employees, in particular older and less-skilled personnel with low digital literacy rates. However, with the sheer size of our sector (29 million employees), private sector initiatives alone may not result in training offers for everyone. Co-financing by the ESF+ will be necessary, especially for SMEs.

3. Policy ask: Member states need to reform their national education and training systems

Skills gaps are more prevalent and severe in some member states than in others. This is the result of the mismatch between what national education systems can offer, in terms of higher education and Vocational Education and Training (VET), and the needs of employers. In addition, advanced digital skills are badly needed to support the digitalisation of retail and wholesale, not only the growing number of e-commerce businesses, but also the digital transformation of independently managed, shop-based retailers and wholesalers (SMEs). National education and training systems should therefore be reformed to allow for the timely and continuous updating of curricula and qualifications. In this respect, the introduction of new curricula based on ‘digital job profiles’, such as the e-commerce merchant in Austria and Germany (see below), should be particularly encouraged.

4. Policy ask: EU and national authorities should support social partnership on VET and life-long learning at EU, national and company level

Social partners design digital job curricula. Retail and wholesale are major investors in education, training and apprenticeships. In Germany for example, retail and wholesale remain one of the largest investors in terms of spending on Vocational Education and Training (VET). Apprenticeships for retail professions are ranked first and second in terms of the number of young people it attracts in that country., devised recently by the Austrian and German social partners in retail and wholesale, is a prime example The new e-commerce merchant apprenticeship of social partner-induced innovation in national education systems to meet the changes in the job market and the growing needs of employers for digital skills in retail and wholesale.

Social partners ensure access to training and continuous learning in the workplace. Up- and reskilling remains fundamentally a shared responsibility between employers and employees. Access to training is facilitated by the many bipartite training funds in the sector – often part of collective agreements. Targeted social partner initiatives add value for companies and boost the employability of employees.

Social partners will need to ensure that the necessary infrastructure is in place that enables employees to catch up as well as to nurture the habit of continuous learning. Good examples of such an approach are individual learning accounts within collective agreements as well as work-based learning within companies. 

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In her State of the Union speech on 16 September, Commission President von der Leyen said:

“We must tear down the barriers of the Single Market. We must cut red tape. We must step up implementation and enforcement. And we must restore the four freedoms – in full and as fast as possible. The linchpin of this is a fully functioning Schengen area of free movement.”

The Commission has proposed a Council Recommendation (COM(2020) 499) with some helpful ideas on a common approach to dealing with a possible second wave of COVID-19 or future pandemics and avoid piecemeal border closures based on widely differing criteria for assessing risk.

Ahead of the European Council this week, the organisations below call upon Europe’s leaders to agree to establish such a common approach.

We fully support measures to contain the spread of the virus and the need for action by national governments to protect their citizens. However, the actions of some governments in maintaining major restrictions on European citizens moving from other EU member states can often seem haphazard, and ultimately damaging to the European economy. It makes little sense in terms of containing the virus to prevent travel from another member state with a similar level of infection if the member state taking that action still allows travel within its borders.

Such restrictions also affect the free movement of goods and services. At the start of the pandemic, we saw essential products, produce and service providers held up where borders were almost completely closed or people delivering these supplies and services subjected to unreasonable restrictions. The EU moved quickly to lift most of these restrictions, but we are concerned to ensure that in, any major new wave of infections, the same common, rules-based approach is adopted and supply chains kept open in a responsible and appropriate manner.

The present uncertainty about a new wave of infections needs action again at EU level. We therefore ask the Commission and European leaders to look at agreeing quickly the ideas set out in the draft Recommendation and to apply them consistently in their member state, so that there are:

- Common procedures and timescales for alerting citizens of changes in countries from and to which travel needs to be restricted

- Harmonised criteria for triggering such restrictions

- Harmonised criteria for choosing from and to which member states travel needs to be restricted

- Common definitions of a health crisis requiring border restrictions.