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Ahead of the Informal Energy Minsters’ meeting today, EuroCommerce Director General Christel Delberghe alerted European decision-makers to the impact of the energy crisis on the retail and wholesale sector, but also signalled its ability to help in finding solutions:

”Retail and wholesale - and its customers - are being hit hard by skyrocketing energy prices. We welcome the underlying principles of the Commission package of measures being discussed today to deal with gas supplies during the winter. But we ask that retailers and wholesalers, who need uninterrupted energy to provide an essential service to their customers, are treated as a priority sector in any power reduction measures, and that they are supported in switching to alternative sources and increasing the energy efficiency of their buildings.”

Retail and wholesale is a significant user of energy in cooling, heating, ventilation and refrigeration needed in providing an essential service to their customers. Our sector can be part of the solution and is already active in reducing its use of electricity and gas and switching to alternatives. It has the capacity to help accelerate the energy transition. To address the short-term challenges of high energy prices, and to achieve these longer-term objectives, our sector needs to be recognised nationally and at EU level as energy intensive, to benefit from the support needed, from a supportive regulatory framework, to accelerate investment.

We therefore call on the Commission and member states to act on 5 major priorities:

• Provide transparency under the Temporary Framework for State Aid to help companies to respond to the energy crisis
• Produce guidance on how to implement the 3% threshold under the Energy Taxation directive to ensure non-discriminatory access to state aid support, both to meet the short-term challenge of spiralling energy costs, improve energy efficiency of our premises, and to invest in the longer term in access to and generating alternative energy.
• Adopt measures such as tax or VAT reductions urgently to reduce current energy costs.
• Pursue the changes proposed under REPowerEU to streamline and accelerate issuing of permits and allow viable investment to maximise our capacity to generate alternative energy and share this where this exceeds own-use needs.
• Match obligations under REPowerEU and in the Energy Performance of Buildings Directive realistically with the ability of operators to bear the cost of the considerable investments these involve, along with availability of equipment and skilled labour in installing solar panels or e-mobility charging stations. The present targets do not take account of this.

Commenting on the European Commission’s third annual Rule of Law report issued today, Christel Delberghe, Director General Christel Delberghe said:

“Retail and wholesale companies need a predictable and non-discriminatory environment to be able to provide an essential service to Europe’s businesses and consumers. We welcome the Commission’s work in highlighting where this is not working, where companies are not all treated equally by public authorities and where it is difficult or nearly impossible to get redress. We would therefore ask the Commission in future reports to include a comprehensive separate section looking at the impact of such actions on business”.

The 2022 Rule of law report reports on trends EuroCommerce has been observing over a number of years – a deterioration of rule of law in the EU affecting not only citizens but also businesses operating in the countries in question, but also making it difficult for those operating across borders, and thus undermining the single market. The problems facing our sector include:

• Issues around the independence of the national judiciary and lengthy procedures to seek redress against national authorities’ decisions;
• access to the process of making decisions affecting our businesses (no or insufficient stakeholder consultation; regular procedures overridden by ‘emergency’ measures)
• legislation knowingly in infringements of EU law, or abusing implementation of EU legislation as a pretext to introduce rules incompatible with the measure and/or EU rules.

Retail and wholesale is an ecosystem comprising 5 million enterprises, both large and small, and is Europe’s largest private sector employer, providing 26 million Europeans with rewarding jobs. Our sector can work as a driver of consumer demand and help build resilience and Europe’s economic recovery in the face of the new economic shocks and inflation resulting from the Russian invasion of Ukraine and the aftermath of COVID. But it needs a stable regulatory environment, legal certainty and predictability to be able to invest in providing Europe’s 450 million consumers with their daily essentials.  The Rule of Law report can play a vital role in ensuring that legal certainty in all EU member states, and hence our request for more focus on business impacts in future reports.

Commenting on the conclusion of the EU - New Zealand trade agreement, EuroCommerce Director General Christel Delberghe said:

“Retailers, wholesalers and traders welcome the conclusion of an agreement providing new trading opportunities between the EU and New Zealand. It shows that EU trade policy still can deliver. This is a much- needed positive step in the open trade agenda which has been under protectionist pressure globally over the last few years. With the disruption caused by the COVID pandemic and the Russian invasion of Ukraine, and the vulnerability these have shown in Europe’s supply chains, this is a further welcome step in easing the diversification of our sourcing of essential supplies.”

Once in place, the EU-New Zealand trade agreement will further build on the EU’s record of concluding trade deals across the world, offering new opportunities for importers, exporters and consumers. The agreement will also ensure predictable conditions and legal certainty for businesses to expand business between the two markets. It will also provide a secure online environment for consumers who engage in digital trade across borders and will remove barriers and prevent discrimination between online and offline activities. The agreement contains a far-reaching trade and sustainability chapter which covers labour, women’s empowerment as well as environmental and climate issues.

Delberghe added: “The removal of tariffs and trade barriers is exactly what Europe’s consumers and businesses need at a time of high inflation across the EU and globally, and an uncertain global economic situation resulting from the Russian invasion of Ukraine. We will be looking to the Parliament and Council to complete the ratification of the agreement and allow its application as soon as possible. We hope that this will act as a spur for further agreement with Australia and progress with more challenging partners such as India.”

Ecommerce Europe and EuroCommerce today jointly published the 2022 European E-commerce Report. In 2021, European e-commerce grew by 13 % to €718 billion euros. The growth rate has remained stable, though it has risen slightly compared to 2020. The 2021 B2C turnover figures show that e-commerce continues to grow, despite lockdowns being lifted and consumers’ ability to visit physical stores again.

After the peak of the COVID-19 pandemic, e-commerce has become even more firmly anchored in the economy and society. Overall, two trends can be identified. On the one hand, the normalisation and stabilisation of the sales compared to the exceptional previous year: E-commerce continued to grow in 2021 and is also forecast to do so in 2022, with growth slowly stabilising. On the other hand, the report identifies that consumers are being more careful in their spending. The effects of the war in Ukraine, inflation, disrupted global supply chains and a general feeling of uncertainty, are bringing the growth figures back to pre-pandemic levels. Nonetheless, the fact that e-commerce sales are only experiencing a small decline so far shows that the digital commerce sector has become indispensable and very resilient. Additionally, the online services industry, such as e-tourism, events and ticketing, experienced a steady recovery during this past year.

Luca Cassetti, Secretary General of Ecommerce Europe, commented: “In the past two years, retailers have gained a lot of experience in digitalisation. This acceleration was significantly pushed by the pandemic, during which e-commerce and retail played an essential role. These developments are reflected in this report. In 2022, Europe has, unfortunately, become the stage of a major conflict. Though still difficult to evaluate, the war in Ukraine will have major consequences on the European economy, as well as on e-commerce markets. Many of our members have already reported declines in consumer purchasing power and confidence, mostly due to high energy prices, inflation and uncertainty about the future. We are calling on EU Member States and policymakers to support Europe’s economy and citizens in these difficult times while continuing to work towards a future-proof legislative framework, fit for omnichannel retail”.

Christel Delberghe, Director General of EuroCommerce, commented: “The retail and wholesale sector is transforming significantly to become more digital, more sustainable and to attract new talent. We estimate that businesses will have to double their investment up to 2030 successfully achieve that transformation. Having a digital presence is becoming a matter of survival for many companies. Our customers expect us to deliver a seamless experience, offering various combinations of online and offline interactions.Supporting SMEs’ digitalisation will require dedicated support, technical advice and building awareness of the various tools to facilitate an online presence. We will be monitoring the implementation and enforcement of the EU’s Digital Agenda carefully to ensure that Europe provides an environment conducive to innovation while ensuring fair competition.”

Ecommerce Europe, EuroCommerce and the Centre for Market Insights will launch the 2022 European E-commerce Report during a webinar on 28 June, from 11h00 to 12h00 CEST. Please register here.

The report was prepared by the Centre for Market Insights of the Amsterdam University of Applied Sciences.

To download the light version of the report, please click here.

NOTES FOR EDITORS                         

The 2022 European E-commerce Report encompasses 37 countries on the European continent, revealing data-driven insights into the current and projected size of their digital markets and consumer trends in internet use and e-shopping. The report includes the latest data and trends surrounding internet penetration, e-shopper penetration, and B2C e-commerce turnover for all 37 countries, with an additional concentrated look at data for the EU-27. It also contains interviews with heads of leading national e-commerce associations and other valuable information for merchants, policymakers and wider e-commerce stakeholders.

Western Europe is, by far, the strongest region in terms of B2C e-commerce turnover, holding 63% of the total turnover for 2021. Southern Europe follows in second place with just 16% of total turnover, while Central Europe and Northern Europe come in third and fourth (10% and 9% respectively), and Eastern Europe (2%) in last place. In actual figures of 2021, Western Europe traded €450 billion euros online, while Southern Europe traded €118 billion euros, and Central Europe €70 billion euros. Northern Europe was just behind Central Europe with €67 billion euros, followed by Eastern Europe with €14 billion in turnover.

Other key findings show that, in 2021, 73% of Europe’s online population purchased online, down from 74% in 2020. Although this reflects a slight drop in online purchasing post-pandemic, several national e-commerce associations have commented the decrease is less than was expected, and some actually reported an increase in online shopping in their particular market. For the first time, Northern Europe has the highest share of e-shoppers with 86% of Internet users having shopped online in 2021. Northern Europe is followed by Western Europe with 84%, and Central Europe with 75%. Eastern Europe, which includes a significant number of countries outside the European Union, had only 46% of internet users shopping online in 2021.

In the wake of the economic fallout created by the Russian invasion of Ukraine, rising energy prices, the ongoing COVID pandemic and Brexit, the time is ripe for the renewal of European integration. This is the best way to generate economic growth, secure employment and promote social inclusion for future generations.

On top of being one of the pillars of peace and prosperity, the Single Market is the bedrock of the EU economy and the foundation upon which many of the EU’s current objectives are being built. It is instrumental to our ability to absorb external shocks, leverage geopolitical power, strengthen open strategic autonomy, drive recovery and deliver on the green and digital transitions. The business community recognises its own responsibility and fully embraces the constructive contribution it can make to address the current challenges.

For its part, the public sector has an important role to play, by reducing market fragmentation and removing red tape including for cross-border business operations. Jumpstarting the motor of Single Market is the best opportunity we have; and it is a responsibility which lies fully in the hands of governments. It should be undertaken urgently for the sake of creating new growth and jobs, as well as avoiding social hardship in the coming decade.

According to the European Commission’s estimate, the benefits of removing barriers to the Single Market for goods and services could amount to €713 billion by the end of 2029; (1) a sum similar to the investments foreseen under the ‘Next Generation EU’s recovery package. Moreover, igniting the integration engine is budget-neutral and would not pose any additional burden on taxpayers. Prioritising the Single Market is low-hanging fruit in times of depleted national budgets.

With the latest Eurostat survey[1] showing inflation in the eurozone reaching 8.1% and likely to rise in the coming months, consumers are being hit by higher prices and higher energy costs while retailers face higher operating costs and rising prices for the products they buy in. Commenting on a new economic study by INSEAD[2] giving further evidence on how buying cooperation can bring about price reductions for consumers, EuroCommerce Director General Christel Delberghe said:

“Retailers have been doing all they can to cushion consumers from the impact of increases in commodity, energy and other product prices, but with narrow margins of typically 1-3%, they can only do so much to absorb price increases imposed by their suppliers. Numerous studies have shown the value of retail alliances in offering high-quality products at affordable prices, and improving customer choice while not restricting competition. A study released today by INSEAD reinforces earlier studies’ findings that international retail alliances lead to a significant reduction in consumer prices. Being a member of an alliance operating in a properly functioning competitive market enables retailers to pass on the benefits to their customers. In the case of the study, this meant consumers paying 12% less for a wide range of everyday products”.

The INSEAD study examined 138,000 stock-keeping units (SKUs) from 20 key food categories (such as cheese, confectionery, chocolate, dry fruit and vegetables or frozen food) over a 6-year period. Based on an analysis of over 6 million observations, the study shows that EDEKA’s customers paid about 12% less for SKUs sourced through the AgeCore alliance compared to what they would have paid for these products without being part of it. It also shows that, not least due to very strong competition in the food retail sector, and the low margins retailers have, EDEKA passed on these savings to consumers. This comprehensive study clearly demonstrates the benefit of retail alliances as a key element in increasing consumer welfare by passing on lower prices. This is of particular relevance in times of rising inflation and its impact on the sector.

The European Commission, in its ongoing review of the Guidelines for horizontal cooperation agreements, already recognises that negotiations between alliances and large manufacturers do not restrict competition. Rather they see it as part and parcel of free competitive markets, which can bring about better prices and more choices for consumers. This is also backed by the European Commission Joint Research Centre, who found in their study that alliances can serve to usefully counterbalance the power of large manufacturers. This is important when such manufacturers adopt unfair industry practices such as territorial supply constraints that limit the ability of retailers to source products freely in the Single Market and offer consumers the full range of products.

Our organizations, Airlines for Europe (A4E), AmCham EU, BUSINESSEUROPE, DIGITALEUROPE, DOT Europe, EFPIA, EUROCHAMBRES, EuroCommerce, European Banking Federation, European Justice Forum, InsuranceEurope, MedTech Europe and U.S. Chamber Institute for Legal Reform, support fair and balanced civil justice systems with effective enforcement of claimants’ rights. The EU should work to promote access to justice while at the same time protecting all parties from opportunistic litigation, increasingly fuelled by third party litigation funding (TPLF).

TPLF allows private financiers, like investment and hedge funds, to sign confidential deals with lawyers or qualified entities to fund lawsuits and arbitration in exchange for a cut of any settlement or judgment/award. TPLF is an estimated €40 to €80 billion market globally. There are more than 100 litigation funders operating in Europe, yet TPLF is largely unregulated in the EU, unlike other financial and legal commercial activities. Private TPLF is not meant to be a public service, and funders can in fact decline to back cases, even meritorious ones, if they do not offer a sufficient financial return.

The introduction of a profit-motivated third party into the traditional attorney-client relationship presents a host of ethical issues and other public policy considerations. Funders may prioritize their bottom-line interests over the interests of the claimants and can unduly influence the decisions in a case. Funders can also arrange to be paid first and take a disproportionate share of any award, leaving claimants who suffered harm with little or no redress.

With no obligation to see cases through to the end and no responsibility for adverse costs, funders can pursue opportunistic claims for a high reward with low risk. Faced with years of litigation, expensive legal bills, and reputational risk, defendants may be forced to settle even unmeritorious claims.

Although Directive (EU) 2020/1828 on representative actions provided for some rudimentary rules around transparency of funders, these rules will only apply to collective actions brought under this one Directive, and not to any other type of claim or law outside the Directive’s scope, including, in particular, those brought via the claims assignment models being operated in various EU Member States.

Furthermore, the Directive does not and could not provide, to the required extent, important safeguards, such as licensing of funders, oversight of funding agreements, and accountability for adverse costs.

Access to justice would not be impaired by imposing clear rules to mitigate the risks posed by TPLF investments. European policymakers should not delay addressing this growing financial industry. The European Parliamentary Research Service reports that the TPLF industry grew by 40% in the EU between 2009 and 2019, and is projected to grow even faster this decade, potentially doubling in size over the next five years.

We are therefore supportive of the European Parliament’s legislative own-initiative report on responsible private funding of litigation, which calls on the European Commission to propose sensible safeguards for effective oversight of TPLF in all areas of law and types of litigation. 

It is important for the investment climate in Europe that the EU supports justice systems that are effective, build trust, and dissuade a culture of litigation. These are essential ingredients for the ‘Justice for Growth’ strategy embraced by the Commission.

We thank the Commission for the opportunity to participate in the call for evidence concerning the the upcoming initiative on effectively banning products produced, extracted or harvested with forced labour. At the CSD meeting on 9 June the Commission said that they would welcome comments on the call for evidence in any form. This paper is the EuroCommerce response to that call for evidence.

Key points
• Our sector is committed to sustainability and being part of the solution. It is involved in multiple voluntary initiatives and responsible business agreements, including ensuring respect of human rights and the environment. These and other initiatives are described on our website www.eurocommerce.eu; sustainable-commerce.com
• The use of forced labour is not acceptable, be it inside or outside the EU. We fully support the aims of the fundamental ILO Conventions No. 29 and 105 and the global commitment to eradicating forced labour by 2030 (Sustainable Development Goal 8.7)
• Any legislative measure should provide for market measures rather than stopping consignments at customs. If nonetheless the Commission proposes a customs-based solution, there should also be a clear time-limit by which a decision is taken on whether the consignment can be released. This includes a timeline for gathering evidence to refute claims.
• It will be important that any legislative measure is consistent with the provisions of the proposal on corporate sustainability due diligence (CSDD), and not seek to extend its scope and coverage.
• The legislation should have clear criteria and explicit processes for deciding on which products are affected, and require a published explanation of why they are applied to a specific product.
• The measure should provide for maximum harmonisation to ensure consistency between member states on applying these, and the Commission may wish to consider a Regulation.
• Reversal of the burden of proof will be particularly onerous on SMEs. These will need clear exemptions as in CSDD and not have obligations imposed on them which they are simply not equipped to fulfil. The Commission should ensure that the measure is consistent with the SME Act.
• Civil (or even criminal) liability should be only applicable if there is evidence of wilful negligence by a company.
• We regret that the normal requirements of better regulation in terms of an impact assessment and proper consultation with the usual deadlines have not been observed in the preparation of this initiative.

World Food Safety Day is an important way to raise awareness of the need to prevent, detect and manage foodborne risks. To mark the fourth World Safety Day today, CELCAA, Copa-Cogeca, EuroCommerce, FEFAC and FoodDrinkEurope want to reiterate their strong commitment to delivering safe food to consumers in Europe and all around the globe. Food safety is essential to human health and well-being, a crucial component of food security, a prerequisite for the achievement of the Sustainable Development Goals and a truly cross-cutting area.

COVID-19 and the Ukraine crisis have shown us how important the EU Agri-food chain is and how essential it is to minimise disruptions in the food supply chains, as consumers must have reliable access to safe food. The provision of safe food is a responsibility carried by all partners in the food supply chain, from farm to fork. Equally, safe feed is a prerequisite for safe food of animal origin, and an integral component of global food safety systems.

Agri-food chain partners remain fully committed to consistent, day-in-day-out efforts to keep food safe. Everyone involved in food production, processing, distribution and retail must identify, evaluate, and control food safety hazards. A risk-based approach to food safety, continuous learning, promotion of a food safety culture and a wide range of regulatory and self-regulatory measures ensure consumers have access to safe products on the market.

Today’s food in the EU is safer, of higher-quality, and has a longer shelf-life than ever before. The safety of food is affected by the health of animals, plants and the environment within which it is produced. Adopting a holistic approach to food safety will deliver a better food safety system.

The Food Safety Platform members (CELCAA, Copa-Cogeca, EuroCommerce, FEFAC and FoodDrinkEurope) have also developed an infographic brochure showcasing their joint responsibility in delivering safe food from farm to fork, which can be downloaded here.

Ecommerce Europe and EuroCommerce jointly held a hybrid roundtable in Brussels yesterday to discuss the upcoming ‘VAT in the Digital Age’ proposal and focus on the Single VAT Registration.

After the introduction of new VAT rules for e-commerce sales to consumers, the VAT One Stop Shop (OSS) has been extended to e-commerce distance selling. Both Ecommerce Europe and EuroCommerce warmly welcomed the introduction of these simplification measures. However, they also highlighted the fact that the new rules still do not address the issue of VAT registration for sellers holding stock in multiple Member States to be as close as possible to the consumers. This means that e-merchants must maintain their foreign VAT registrations in every EU country where they are sending or holding stock.

The Roundtable brought together policymakers, industry stakeholders and VAT experts to discuss the technicalities and benefits of extending the existing VAT OSS to all shipments of merchandise where the seller of record is not located in the EU country of taxation. In view of the upcoming publication of the ‘VAT in the Digital Age’ proposal foreseen for October 2022, Ecommerce Europe and EuroCommerce ask to extend the VAT One Stop Shop to include:

- cross-border movement of own inventory across the EU and

- domestic sales from distribution hubs by a seller that is not established in that EU country.

Luca Cassetti, Secretary General of Ecommerce Europe, commented: “The One Stop Shopis undoubtfully a success story in the simplification of EU VAT legislation and a great achievement to ensure a level playing field between EU and non-EU sellers. However, the OSS still needs to include movement of own goods and onward B2C and B2B sales. This is because businesses with multiple warehouses in EU countries still have to VAT-register in each country of storage, a burdensome requirement. With today’s event, we’ve made it clear that the solution is out there, and the Commission is determined to make it happen, to the benefit of European businesses, consumers, tax administrations, customs authorities, and ultimately the environment too.”

Christel Delberghe, Director General of EuroCommerce, commented: “Last year’s VAT e-commerce package has facilitated VAT compliance in the EU, but VAT legislation is still one of the main barriers which often prevents retailers and wholesalers to trade cross-border, in particular SMEs. VAT registration in different Member States is time-consuming and costly with companies spending around 8,000 euros on compliance costs per year and country. The Commission ‘VAT in the Digital Age’ initiative is a welcomed opportunity to facilitate trade within the EU by making VAT compliance simpler, fairer and more efficient.”

Ahead of the Roundtable, Ecommerce Europe and EuroCommerce have jointly launched a campaign with a website an informative video and communication tools to raise awareness of the benefits of a Single VAT ID in Europe.