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Commenting today on the European Commission announcement of an in-depth investigation into to the Slovak Retail Tax Law and an injunction suspending the application of the law, EuroCommerce Director-General Christian Verschueren said:

“We commend the Commission for acting swiftly to investigate, and meanwhile suspend, the Slovak retail tax under state aid rules. This decision is a signal to Member States that they are not allowed to discriminate against foreign-owned retailers who have contributed substantially in terms of investment and commitment to their markets. It is sad that Member States are less and less committed to the single market, and are prepared to deprive consumers of more choice and better prices for short-term political gain.”

EuroCommerce lodged a complaint against the tax in December 2018. The tax, which applied almost exclusively to foreign-owned companies active in the country, requires them to pay 2.5% of their net turnover, from which the Slovak government expected to raise €100 million. The EuroCommerce complaints focused on its clear view that the tax was incompatible with EU law on two counts. By exempting most Slovak-owned retail chains, the tax constituted unlawful state aid, similar to retail taxes previously proposed in Poland and Hungary, and subsequently found illegal by the Commission. Secondly, the discriminatory nature of the tax infringed the clear Treaty principle of freedom of establishment.

Last week, the Slovak parliament approved two further questionable amendments to the Slovak Food Law, obliging food operators to ensure 50% of food and agricultural products advertised is of Slovak origin, and another obliging food operators to pay any fine, even if they appeal against it. This is important as Slovak enforcement authorities often impose high fines of up to €1 million even for minor infringements that do not jeopardize consumer safety, with a focus on foreign-owned retailers.

Verschueren added:

“The retail and wholesale sector relies, like all business, on the EU single market working properly and competition law underpinning this. Where some people are questioning competition law and its relationship with business, this is a clear demonstration of how the Commission’s vigilance and application of the rules provides concrete help to businesses and above all, consumers, to benefit from EU rules.”

EuroCommerce press release 4 February 2019

Innovation has always been a driving force in the retail and wholesale sector. It has made shopping more convenient, more enjoyable and more cost-effective. The rapid spread of digitalisation has transformed the face of the industry, with physical and digital components of the shopping experience no longer easily separated. Against this background, there is a consensus that international tax rules are no longer fully fit for purpose and that the current tax rulebook has created unfair outcomes in a number of areas. This contributes to a sense of distrust and is damaging business confidence, which we consider vital to the success of the economy and wider society.

EuroCommerce wants to engage in the discussion and make a positive contribution to the international tax reform debate, to move it forward and deliver actionable results.
To make the tax system suitable for the digitalised economy, EuroCommerce calls for the modernisation of existing international tax rules, consistent with the following principles:

• Fair - A modern taxation system should be channel-neutral and operate equitably across industries and between different forms of business activities and business models. A neutral tax system will contribute to efficiency by ensuring an optimal distribution of fiscal liabilities. Any form of corporate tax should be based on economic profits generated and not on its revenues. Tax systems and rules should also seek to avoid double taxation and non-taxation arising from uncoordinated government decisions. Taxes particularly targeted at specific retail and wholesale business models should be abolished and avoided.
• Simple - Tax rules should be clear, simple to understand and predictable. A reform of the taxation system should not lead to higher compliance costs.
• Proportional - Administrative burdens for retailers and wholesalers should be in adequate proportion with the tax revenues generated.
• Enforceable - Rules should be globally enforceable, especially in respect of non-EU businesses, thus ensuring EU businesses are not at a competitive disadvantage.
• International - The OECD and the G20 are the best platforms to deliver the most effective and fairest outcome. National stand-alone measures risk fragmenting the market further and should be avoided.

Speaking today ahead of the European Parliament vote on the Plastics directive, EuroCommerce Director-General Christian Verschueren warned that the directive needs to be implemented properly and to avoid distorting the Single Market:

“We are as a sector already actively doing our bit in reducing plastic waste, but to do so effectively we need consistent implementation, and the engagement of the whole supply chain and public authorities to achieve real reductions in single-use plastic and marine litter. Without a proper waste management infrastructure and sufficient recycling facilities we will not achieve a circular economy or the objectives of this directive”.

While retailers and wholesalers have doubts about certain parts of the final compromise, particularly on waste and litter management systems, we welcome the flexibility that the directive allows for economic actors to use alternative or existing measures to reach the waste management targets under the directive. But above all, the Commission needs to issue clear guidelines to ensure that the directive is implemented consistently and in a way which is workable.

Retailers and wholesalers have actively engaged in decreasing the volume of plastics used in their stores and in the supply chain and thus their impact on the environment. A number of our members have made pledges on plastics reduction with the European Commission, and others committed through the Ellen MacArthur Foundation or the Consumer Goods Forum.

In concrete terms, these commitments mean the absolute elimination of unnecessary single-use plastics items, higher levels of recycled content in products, and innovative approaches such as “natural branding”, with laser printing directly on the peel of fruit and vegetables to eliminate plastic stickers or other packaging.

Verschueren added:

“Looking beyond today’s vote, the Commission will have important work to do in producing implementation guidelines to ensure consistent rules across Europe on crucial elements of the directive like the definition of single-use plastics and the criteria on the clean-up costs of litter, and ensuring commitment by the whole supply chain.”

Consumer confidence is the number one priority for retailers and wholesalers. To maintain this confidence and ensure that customers come back, they are committed to ensuring a high level of product safety and quality.

The infographics explains the different steps a product goes through until it reaches the customer, and the roles and responsibilities of each actor in the supply chain to ensure the safety and quality of a product. Indeed, retailers and wholesalers are in the forefront of addressing identified risks and non-compliance. They actively cooperate with enforcement authorities to make sure that measures are taken quickly to correct or avoid product safety risks and to inform the manufacturer or the importer. These actions, combined with consistent, fair and effective enforcement, will help ensure that only safe products are placed on the market.

This Guidance aims to provide a common understanding of the adopted provisions to interested stakeholders, such as food business operators (both small and medium-sized enterprises and large food business operators) as well as EU and national policy-makers.

In view of the upcoming trilogue discussions on the proposal to modernise consumer law, the undersigning organisations would like to reiterate our support for effective consumer protection and enforcement within the Single Market. The evidence put forward by the European Commission in its REFIT confirmed that the current consumer rules still address well the need for consumer trust, and encourage a healthy competitive environment. We have therefore welcomed the Commission’s targeted approach, focusing on key areas rather than an overhaul of the entire legal framework. However, the coregulators’ approaches substantially change the scope of the Commission’s proposal, which raises concerns for businesses who will now face new and fragmented rules.

With less than 20 days remaining, European businesses are calling for a no deal Brexit to be averted immediately to avoid major disruption of supply chains across all industries and to protect jobs. The undersigned organizations reiterate that a no-deal Brexit will have disastrous consequences for businesses and citizens on both sides of the Channel. EU and UK companies have benefited from over 40 years of economic integration and 25 years of the Single Market. As a result, value chains have become so closely intertwined that a nodeal Brexit will lead to chaos.

The Supply Chain Initiative (SCI) published its annual report for the year 2018 today. The results of the annual survey of registered companies showcase that the SCI continues to make progress in the promotion of fair business practices in the food supply chain as a basis for commercial dealings.
 
The Supply Chain Initiative (SCI) annual report 2018 contains the results of the annual survey of registered companies, highlights its dispute resolution mechanism and points out the work of national platforms and initiatives. Overall, satisfaction with the SCI remains high among registered companies with a commitment to promote and respect the SCI Principles of Good Practice.
 
The survey results indicate that 9 out of 10 companies trained all or part of their staff members on the Principles. Since their registration 84% of the registered companies communicated their adherence to the SCI to their business partners at national and/or group level. Companies considered that the SCI has helped them to improve daily communication with their trading partners (43%), improve their internal company processes (24%) and deal with disputes (21%).
 
“Our primary purpose is to promote fair business practices throughout the food supply chain as a basis for commercial dealings. We also aim to ensure that companies can lodge complaints without fear of retaliation, and are able to resolve their issues and disputes in a quick and efficient manner. The results of the 2018 annual survey confirm that we are moving in the right direction. Only 3% of companies expressed a fear of retaliation and 69% of respondents indicated they were satisfied to very satisfied with the SCI,” says Michael Hutchings, SCI Chair.
 
The dispute resolution mechanism is a key pillar of the work of the SCI and allows companies to lodge an aggregated dispute with the Chair in full confidentiality, provided there is a cross-border element and the issue could not be resolved at the national level. In 2018, disputes were reported and dealt with exclusively at the national level with 20 companies having been faced with an alleged breach of at least one of the Principles of Good Practice since 20 November 2017. 16 companies resolved the issue informally. Four companies were not able to solve the issue informally, as a result of which 1 company lodged three complaints.
 
“There is a wide range of national platforms and initiatives based on the SCI model or who have taken into account the SCI Principles of Good Practice. The report highlights the dispute resolution activities of the Belgian, German and Finnish models as examples of good practice. I am encouraged to see how effective their respective dispute resolutions at national level are, which is where the impact of our work is most visible,“ concludes Michael Hutchings.

Speaking after the approval of the EU-Singapore Trade and Investment agreements by the European Parliament today EuroCommerce Director-General Christian Verschueren said:

“Singapore evolved from a developing country to one of the most sophisticated and prospering economies in Asia within one generation. This success story can be put down almost entirely to Singapore’s unequivocal commitment to free trade. The European Parliament’s approval today opens a further avenue for mutual benefit through open and free markets, and confirms the EU as a promoter of the world trading system where important partners seem to be turning away from it.”

Singapore is by far the EU's most important partner in the ASEAN group. Total bilateral trade in goods in 2017 was over 53 billion euro and a further 44 billion in services in 2016. Over 10,000 EU companies are established in Singapore to serve the whole Pacific region. The trade agreement with Singapore will remove nearly all remaining tariffs on EU products, simplify customs procedures and set high standards and rules. The Free Trade Agreement simplifies trade in goods like electronics, food products, alcoholic drinks and pharmaceuticals, and opens up the market for various services.  It is complemented by a separate agreement, also approved today, covering investment.

Both agreements still need a final sign-off from the Council, allowing the trade agreement to enter into force. The investment treaty will need also to be ratified by national parliaments.

Verschueren concluded: “Today’s approval by the European Parliament creates a solid bridge for trade with the booming economies in the ASEAN group. We are keen to see the Council follow suit in ratifying the trade agreement quickly, so that it can enter into force and benefit the European economy, and that national parliaments give the investment treaty priority to give additional certainty to European companies keen to invest in the region.”

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Contact:

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu   
Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu   

Speaking today after agreement in trilogue negotiations on the Regulation on Transparency and Sustainability in the EC Risk Assessment Process, EuroCommerce Director-General Christian Verschueren said:

“Retailers and wholesalers in Europe support the work of the European Food Safety Authority (EFSA) in its role as the independent European voice for food safety. Ensuring that the food we sell is safe and maintaining consumer trust is central to our business. EFSA provides a vital scientific reference for us in our concerted efforts to prevent unsafe food products entering the market and harming consumers.”

The added transparency this regulation will provide for is a welcome step in underpinning consumer trust in the food they buy. It also acknowledges the need for better communication about risk, which is very important for maintaining consumer confidence and improving their perceptions of risk. Past food crises, such as with fipronil and eggs in 2017, showed serious shortcomings in how quickly a risk was communicated and how the responses were coordinated between national and EU authorities, and with key stakeholders in the supply chain. The agreement today needs to lead to clear and coordinated messaging when problems arise.

 Verschueren added:

“In these times when unfounded or alarmist statements on social media can cause consumers real concern and confusion, it is paramount that we can all respond quickly with clear and accurate information. All parts of the supply chain, particularly retailers who are in the front line in dealing with consumers, need to be kept in the loop. EFSA has been successfully piloting improved transparency for some years, and the Commission needs to make sure that this is extended fully to the decision-making process. Stakeholders, in particular food businesses, should be able to provide informed views on how best to develop and implement new rules.”

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Contact:

Kinga Timaru-Kast - +32 2 894 64 83 - timaru@eurocommerce.eu   
Neil McMillan - +32 2 737 05 99 - mcmillan@eurocommerce.eu