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The new European Commission sets ambitious targets and timeline to reach a climate-neutral and circular economy. The retail and wholesale sector recognises the lead that the EU takes to respond to increasing environmental challenges in terms of resources scarcity, access to materials, human rights and resources efficiency.

The release of the Green Deal is an opportunity to reiterate our commitments for a greener economy. This document aims to present our expertise to drive the shift to a more circular and green economy.

Circular Economy is an opportunity for retail and wholesale as it allows our sector to rethink business models, offer alternative products and support and nudge a more sustainable lifestyle. It is a two-way approach both responding and leading to societal change. Indeed, beyond the increasing demand by consumers and regulators to offer more sustainable alternatives, the Circular Economy is an opportunity to rethink the way we produce, manufacture, sell, use and discard our products.

Hence, the initiatives led by European retailers and wholesalers encompass a large variety of initiatives beyond the most visible reduction of (plastic) packaging.

This briefing aims to address key measures to help our sector to deploy circular business at its full scale and support the Commission’s work in developing its 2020 New Circular Economy Action Plan.

EuroCommerce is one of the 14 European business associations calling for a swift ratification of the EU - Vietnam free trade agreement.

The free trade agreement (FTA) between the EU and Vietnam, concluded in 2015, is the most ambitious trade deal ever negotiated between the EU and a developing country. The FTA will eliminate over 99% of all tariffs, and partly remove the rest through limited zero-duty quotas, known as Tariff Rate Quotas (TRQs). Tariffs on EU exports to Vietnam will be gradually removed over a 10-year period. EU duties on imports from Vietnam will be eliminated progressively over a 7-year period.

More information in the EVFTA Business Coalition joint-brochure

The EU-Vietnam FTA

Chances for European and Vietnamese business, consumers and workers

Growing better together

The undersigned business associations respectfully request Members of the European Parliament (MEPs) to consider the benefits for both sides and to approve the EU-Vietnam Free Trade Agreement.

We note that the negotiations on the EU-Vietnam FTA concluded in December 2015, and both European and Vietnamese businesses and consumers have been waiting since then for its ratification and entry into force.

The trade agreement, with its liberalisation of tariffs and deepening of business links, represents a great opportunity for European businesses – granting access to a strong emerging market of close to 100 million people. It also opens the door to partnership, dialogue and cooperation with Vietnam creating stronger ties with the South-East-Asian region and will raise standards for consumers and workers alike. The agreement contains a strong chapter on trade and sustainability, to which the Commission and Vietnam have made a strong commitment to ensure close compliance. Furthermore, the Vietnamese government has made an equally strong commitment to address earlier concerns about workers’ rights and ratify and implement three core ILO conventions. One of these has already been transposed into Vietnamese law, and the Vietnamese government will implement the others shortly, significantly improving the situation of workers in Vietnam.

The EU-Vietnam Business coalition firmly supports the approval of the EU-Vietnam Agreement, and we ask for your support of ratification of this Free Trade Agreement in the INTA committee on Tuesday, 21 January.

At a high-level Commission Conference on Food Waste today, EuroCommerce and other members of the EU Platform on Food Waste and Loss renewed their commitment to work together with all others in the food supply chain to reduce food waste. EuroCommerce actively participated in the preparation of cross-sectoral recommendations launched by the Commission at the conference.

Speaking today, EuroCommerce Director-General Christian Verschueren underlined the need for a holistic approach to reducing food waste:

“Our sector’s positive contribution to reducing food waste needs to be matched by action from public authorities if it is to be as effective as possible. We need decision-makers to make the legal position and tax treatment of donations of food a lot clearer and more favourable in order to create the right conditions for wholesome food which cannot be sold to get to people who can benefit most from it.”

The retail sector has actively driven sustainability issues through voluntary action at company or national and European  level, such as the 2012 Retail Agreement on Waste and the resolution of the Consumer Goods Forum, under which leading food companies and retailers pledged to halve the amount of food wasted within their operations by 2025. Several retailers have also taken part in the EU-funded REFRESH project.

Retail and wholesale accounts for less than 5% of total food waste along the food supply chain, but is nevertheless working hard with all stakeholders, including consumers, to reach the UN Sustainable Development Goals, supported by the European Union, to halve waste by 2030.  These already include actions also covered by the Commission’s sectoral recommendations, in particular:

• working with upstream partners by optimising merchandise planning and storage, logistics and delivery;

• managing food waste in shops;

• engaging with consumers through information campaigns.

As food waste has undeniable environmental, social but also economic consequences, our sector takes this issue very seriously. Cost of food waste and markdowns for European retail is estimated to be some €13 billion, or 1.6 % of total sales, so there are both commercial and environmental win-win in tackling the problem effectively.

Today EuroCommerce and ERRT celebrate the 10-year anniversary of the Retail Forum for Sustainability and the Retail Environmental Action Programme (REAP) in a joint event organized together with the European Commission. We value the close and constructive partnership we have enjoyed with the European Commission and other signatories in the Retail Environmental Action Programme. We are now looking forward to the next chapter.

In 2009, the European Commission launched their Sustainable Consumption and Production Action Plan. It recognised the important contribution retailers make to sustainability and to influencing sustainable consumption. This generated the Retailers’ Environmental Action Plan, a voluntary initiative co-chaired by retailers and the European Commission, aimed at reducing environmental impacts in the retail sector and its supply chain, promoting more sustainable products, and providing better information to consumers.

Over those years, sustainability has become mainstream. We are now glad to be working towards the next phase of our cooperation within the Commission’s efforts around the European Green Deal, which is being presented today.

Kestutis Sadauskas, Director Circular Economy and Green Growth, European Commission, said:

“The retail sector can play an important role in promoting the circular economy, raising consumer engagement and greening the supply chain. We look forward to scaling up and accelerating the transition to a circular economy with retailers through the European Circular Economy Stakeholder Platform, to deliver on our joint commitments to fight climate change and biodiversity loss and promote resource efficiency.”

EuroCommerce Director-General, Christian Verschueren, added:

“Our members have been very active over the last 10 years, with voluntary action and in applying evolving rules to help build a sustainable, circular economy. They have done so by working on their own operations, and by persuading their suppliers and customers to act. They are committed to stepping this up in the future, but this needs all parts of the supply chain, and public authorities to play a constructive role.”

ERRT Director-General, Susanne Czech, continued:

“Europe is leading the world towards a circular economy shift and our members, large contributors to the European Union economy, are keen to play a leading role in shaping it in Europe. The Retail Forum today has showed us once again how important it is to gather all actors across the value chain around the table when discussing circular economy. Circular Economy is a strategic cornerstone and a collective calling, an opportunity for stakeholders to work together and make a real difference.”

~ENDS~

Speaking today on behalf of European retailers and wholesalers, EuroCommerce Director-General Christian Verschueren supported the Commission strategy set out in its long-awaited European Green initiative to reduce greenhouse gas emissions by 2050:

“The Green Deal presents a tremendous opportunity for Europe to take on global leadership in creating a sustainable and more competitive economy. Our sector has already acted in a wide range of voluntary initiatives to reduce its impact on the environment. These range from improving the efficiency of its operations in store and across the supply chain, to being a leading actor in enabling recycling and addressing food waste.”

Retailers and wholesalers also work closely with their supply chains to reduce waste and emissions, and in supporting informed and healthy choices by consumers. Our sector has been proactive in introducing natural refrigerants and implementing renewable energy sources in its stores and distribution centres as well as reducing CO2 emissions in its transport fleet. It also works to address deforestation, create better traceability, a wider range of alternative products such as organic, free-from and alternatives to meat.

In EuroCommerce’s view, the European Green Deal should be built upon the existing legislation, recognise the value of voluntary initiatives, and:

• Enable diversity of action: the retail and wholesale sector needs to respond to a wide variety of consumer demand, and policies under the Green Deal must reflect that diversity of choices made by consumers every day;

• Ensure consistency in national and EU legislation: new and previous regulatory requirements should not contradict or hamper each other’s effectiveness;

• Involve everyone: cooperation among stakeholders, according to the involvement and influence of each actor in the supply chain will be essential to making a success of the Green Deal.

-ENDS-

The WTO Appellate Body will cease to function tomorrow due to retiring judges and the blockage of new judge nominations. Commenting on the situation, EuroCommerce Director-General Christian Verschueren said:

“Retailers and wholesalers depend on free trade and global supply chains to give customers the goods they need when they need them. A properly-functioning multilateral trading system is essential to guarantee that this can happen. We therefore deeply regret the impasse in Geneva on the WTO Appellate Body and call upon all WTO members to work on a way out as soon as possible.”

The Appellate Body plays an important part of the WTO’s role in resolving contentious trade disputes. Without a quorum, now rendered impossible by the retirement of some of its existing members and their replacement being blocked by the US, it can no longer function.

EuroCommerce has supported the European Union and other WTO members in working on an alternative framework if proved effective. But it would be best if the United States would reconsider its approach, which endangers the whole basis of the WTO as the guardian of multilateral free trade and adherence to rules agreed by all members of the organisation. Verschueren added:

“We support open discussion between WTO members of concerns at how the organisation works. The best way to address these is through proper dialogue. Blocking the functioning of the organisation - whose work on free and fair trade has lifted millions out of poverty - cannot resolve anything. Rather, it risks a return to the protectionist law of the jungle where the largest trading partners will bully the weakest. This will make global trade falter, and result in everyone being poorer.”

-ENDS-

Retailers and wholesalers in Europe expressed their support for the new Commission under Ursula von der Leyen.  Speaking today after the convincing European Parliament vote in favour of the new team, EuroCommerce Director-General Christian Verschueren said:

“We are pleased to be able to mark the start of a new Commission with a clear set of priorities and bold ambitions. We fully support coherent action to address climate change and sustainability under the Green Deal, but will be stressing the need for this to be pursued in ways which engage all parts of the supply chain, including consumers, in a positive way. We look forward to working with the Commission on making Europe fit for the digital age. Digitalisation is already transforming our sector, and we have to ensure that SMEs and consumers can also benefit directly. Above all, we will be stressing the need for open markets and addressing the rising tide of protectionism both in and outside the EU. We need to remember that the Single Market is the keystone of European integration and our future prosperity.”

Earlier this year EuroCommerce issued its Manifesto for the new European Parliament and Commission, and is pleased to see that many of the priorities set out so far by Mrs von der Leyen for the Commission over the next 5 years coincide with our four priorities – on building a successful data economy in Europe, securing fair competition and freedom to do business, safeguarding open markets in and outside the EU, and supporting a sector committed to people and sustainable living. 

Verschueren added:

“We face an increasingly unstable and challenging global economic environment, and slowing growth in Europe. A properly-functioning single market and continued commitment in Europe to competition and freedom to trade, will remain the best approach to making Europe a globally competitive force and giving our economy a much needed boost – while ensuring a sustainable future for citizens of Europe and the world.”

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Member States keep on proposing retail-specific taxes based on turnover. This may put retailers out of business, decrease choice and in the end increase consumer prices.

After Hungary, Poland and Slovakia, Lithuania has now proposed a new retail tax. The proposal consists of a flat rate of 1% on consumer sales, with a turnover threshold of EUR 2 million a month.

Christian Verschueren, Director-General of EuroCommerce, said:

“Retail businesses are closest to consumers, and especially in food, they operate with very low average margins of 1 to 3%. At the same time retailers are major local employers, and support local communities and businesses. They source locally on average 70% of products they sell. Turnover-based taxes will either lead to retailers having to absorb the cost, renegotiate conditions with suppliers or increase consumer prices. It is really unclear what Member States want to achieve with these taxes.”

In addition, the European Commission has concluded that most of the taxes introduced have constituted unlawful state aid and the Court of Justice of the European Union concluded in case C-385/12 that the Hungarian 2010 retail tax was indirectly discriminatory.

Rūta Vainienė, Executive Director of Lithuanian Association of Trade Companies, said:

“It is unclear how the proposed retail tax in Lithuania will improve consumer choice and help retailers keep prices low for Lithuanian consumers. It is unclear why the lawmakers have singled out the retail sector, which has low profit margins. We call upon the European Commission and our Government to be vigilant and protect the interest of Lithuanian consumers, and ensure that Lithuanian retail businesses remain competitive.”

Often Member States that propose retail-specific taxes have also introduced other types of restrictive laws on retail, e.g. regulation of B2B relationships to the benefit of (large international) suppliers, providing advantages for local products vis-à-vis products from other Member States, making larger retailers subject to competition law restrictions, regardless of their real market power, and restricting establishment / reconstruction / expansion of stores.

This is undermining the Single Market and it is creating a hostile environment for new competitors which will lead to less competition. Higher consumer prices and less choice will be the end result.

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The undersigning European Business Associations, representing a range of sectors, wish to reiterate their support for negotiations on the revised pan-Euro-Mediterranean Convention (PEM Convention) and to see it adopted by the PEM Joint Committee at its next meeting on 27 November 2019.

The aim of the PEM Convention has been to establish a single legal instrument, bringing together all the rules covering preferential origin of goods traded in approximately 60 bilateral free trade agreements between the countries of the pan-Euro-Mediterranean area.

In this final phase of negotiations, we call on all involved to work for an ambitious, future-proof and more flexible set of rules of origin covering all parties to the convention.

The revised PEM Convention will benefit all countries involved by enabling European businesses to react more rapidly to changing economic realities and to strengthen their supply chains in the region.