Annexes to COM(2018)219 - European retail sector fit for the 21st century - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)219 - European retail sector fit for the 21st century. |
|---|---|
| document | COM(2018)219  |
| date | April 19, 2018 |
Territorial supply constraints drive market segmentation, limiting competition and resulting in likely significant discrepancies between wholesale and consumer prices or the choice of products offered to consumers across the EU. 65
Such behaviour should be prevented, so that parallel imports by retailers become possible for all products allowing them to bring the Single Market even closer to European consumers. The Commission will undertake further fact-finding on the effects of such practices on the Single Market. Further action may be needed, if the situation does not evolve as a result of suppliers' voluntary change in approach.
Regulatory sourcing restrictions
In accordance with the Single Market for goods, retailers need to be able to enjoy the freedom to set up their supply chains, including cross-border, to enhance consumers' access to a wide choice of products at competitive prices.
Example: The Czech Republic and Slovakia removed regulatory requirements for certain retailers to report on the proportion or percentage of turnover from the sale of food sourced or produced domestically.
Contractual practices of modern retail
If public authorities regulate practices to protect vulnerable operators, in accordance with the freedom of establishment, they should not prohibit those contractual practices between retailers and suppliers which are mutually beneficial.
Example: In Ireland, if a supplier expressly agrees in a contract to make a contribution to marketing costs, this is not prohibited, subject to safeguards such as requiring an objective and reasonable estimate of such a contribution.
Territorial supply constraints
Private operators should not prevent retailers from exploiting fully the possibilities of the Single Market to source products cross-border. Retailers should be able to offer consumers access to a wide choice of products, including different versions of the same product, at potentially lower prices.
Example: Retailers should be given the choice to decide from which national entity of the supplier the goods should preferably be sourced.
5.Alleviating the cost of compliance
Complying with regulations has a cost – the cost of compliance – which may amount to 0.4% to 6% of retailers' annual turnover. 66 For micro-companies, this is a particularly heavy burden. 67
Respondents to the open public consultation identified areas where improvement could be made: reporting business information, notifying changes, inspections 68 , more proportionate fines and sanctions.
The Commission made a strong commitment to promote better regulation principles in recent years both at EU and at Member States level. 69 There is also a need for Member States to check whether national regulations are well-targeted, evidence-based and clearly drafted. Less complex regulations, better awareness of the sector's specificities and policy support would help the retail sector to be flexible and innovative. 70
Fostering the development of the retail sector to the ultimate benefit of consumers requires a broad approach: simplifying regulatory frameworks, ensuring that they are fit for a multi-channel environment as well as reducing the overly burdensome and costly measures and procedures imposed on retailers to ensure compliance with these rules.
Administrative burden and sanctions
When designing and applying regulations, in particular governing the day-to-day operation of shops, public authorities are encouraged to take into account the implied costs of administrative tasks and necessary equipment. This is particularly important for SMEs as well as public authorities.
Example: Facilitating applications or reporting through on-line tools, as well as simplified administrative procedures and streamlined inspections lead to important savings and allow in particular small retailers to shift resources from administrative tasks to their core business, including innovation.
6.Conclusions
A well-functioning Single Market and a modernised regulatory environment are indispensable for an EU retail sector fit for the 21st century. The legal guidance and best practices set out in this Communication should assist Member States in their reforms towards a more open, more integrated and more competitive retail market without putting at risk the pursuit of legitimate public policy objectives.
Reducing restrictions in retail would also have positive spill-over effects in other sectors of the economy, in particular upstream in manufacturing. A more efficient retail sector and lower consumer prices create more demand and steer the upstream manufacturers towards more innovative products.
While the rise of e-commerce offers unprecedented opportunities for the retail sector as well as consumers, restrictions affecting brick-and-mortar retailers do not enable them to adapt to changing consumers' habits. On-line consumers are used to shop anytime and anywhere. It is therefore crucial that, when designing and implementing relevant regulations, national regional and local authorities take into account that multi-channel retail will remain the trend for retail in the coming years.
The legal guidance and best practices set out in this Communication should help public authorities assess their regulatory frameworks and identify less restrictive measures. Member States must continue assessing the existing and proposed measures for the retail sector to ensure that they are non-discriminatory, duly justified and proportionate. They are also encouraged to ensure that these measures are effective for the public policy objectives pursued, address their urban development concerns in a proportionate way, and are fit for the quickly changing retail environment. The national competition authorities should play a role in this assessment.
The retail restrictiveness indicator will be used as a dynamic monitoring tool to measure Member States' efforts in reducing retail restrictions, while taking into account justified public policy objectives, such as public health, and the impact of such reforms on market performance, including productivity, prices, innovation as well as the spill-over effects on other sectors.
The Commission will continue to monitor the evolution of the relevant regulatory frameworks and the trends in the retail sector. This monitoring will feed the Commission's economic analysis within the framework of the European Semester. It will also provide basis for priority-setting in the framework of the Commission's enforcement policy in the retail sector.
An effective partnership between relevant EU and Member States' actors at all levels is necessary to improve the overall policy framework for the retail sector. The Commission will continue the dialogue between the EU institutions and the national, regional and local authorities as well as the representatives of the retail sector on the future of this sector.
(1)
Retail is the biggest sector in the EU non-financial business economy in terms of number of enterprises and persons employed, generating 4.5% of the value added of the European economy and providing 8.6% of all jobs in the EU; Eurostat, 2014.
(2)
In the EU, 68% of Internet users (who account for 81% of the population) shopped online in 2017. Among those online shoppers, 33% purchased from sellers in other Member States, and 23% from sellers located in non-EU countries. Source: Digital Economy and Society Index (DESI) 2018.
(3)
Such reforms have taken place e.g. in Belgium, Denmark, Finland, France, Italy, Luxemburg and Spain.
(4)
For example, in Canada, Japan, Australia and the United States of America.
(5)
See the analysis in the Staff Working Document accompanying this Communication, SWD(2018) 236.
(6)
Data for the RRI reflect the state of play for 2017. In some cases, when important changes took place after December 2017, the information has been updated and taken into account in the scores. The most recent data from Eurostat available at the time of the analysis is for 2015.
(7)
A Digital Single Market Strategy for Europe, COM(2015) 192 final.
(8)
Regulation (EU) 2018/302 of 28 February 2018 on geo-blocking.
(9)
Regulation on cross-border parcel delivery services [entry into force in May 2018].
(10)
Directive 2017/2455 of 5 December 2017 amending Directive 2006/112/EC and Directive 2009/132/EC as regards certain value added tax obligations for supplies of services and distance sales of goods.
(11)
Proposal for a Directive on certain aspects concerning contracts for the supply of digital content, COM(2015) 634 final; Amended proposal for a Directive on certain aspects concerning contracts for the online and other distance sales of goods, COM(2017) 637 final.
(12)
Mid-Term Review on the implementation of the Digital Single Market Strategy, COM(2017) 228 final.
(13)
A Fair and Efficient Tax System in the European Union for the Digital Single Market, COM(2017) 547.
(14)
Regulation (EU) 2018/72 of 4 October 2017 supplementing Regulation (EU) 2015/751 on interchange fees for card-based payment transactions.
(15)
Europe's next leaders: the Start-up and Scale-up Initiative, COM(2016) 733 final.
(16)
A New Skills Agenda for Europe; COM(2016) 381 final.
(17)
Proposal for a Regulation on the mutual recognition of goods, COM (2017) 796.
(18)
Proposal for a Regulation on compliance and enforcement, COM(2017) 795.
(19)
Amended proposal for a Directive on certain aspects concerning contracts for the online and other distance sales of goods, COM(2017) 637 final.
(20)
A new deal for consumers, COM(2018) 183.
(21)
Recent judgment of 30 January 2018, Visser, C-31/16, par. 97.
(22)
Directive 2006/123 of 12 December 2006 on services in the internal market (the Services Directive).
(23)
European Council conclusions on Jobs, Growth and Competitiveness, 22 March 2018.
(24)
Upgrading the Single Market, more opportunities for people and businesses; COM(2015) 550 final.
(25)
European Council conclusions on Jobs, Growth and Competitiveness, 22 March 2018.
(26)
Joint statement on the occasion of the 25th anniversary of the Single Market by the Presidents of the European Parliament and the European Commission, and the Council Presidency, 20 March 2018.
(27)
See Commission Staff Working Document Public Consultation on Retail regulations in a multi-channel environment – Synopsis Report, SWD(2018) 237.
(28)
See the analysis in the Staff Working Document accompanying this Communication, SWD(2018) 236.
(29)
Commission research based on the OECD Product Market Restrictiveness indicator suggests that a reduction of the OECD index by one point would produce a reduction of 7% in the price level (European Commission, Background documents for the European Semester (2018), The EU retail sector).
(30)
Building on the OECD methodology for the PMR index, in the RRI the Commission attributed numerical scores to regulatory situations in Member States within relevant aspects. Values assigned to each aspect range from 0 to 6 points, where 0 indicates the least and 6 the most restrictive regulations. Information underpinning the results has been gathered and verified through the consultation of Member States. The RRI methodology has also been consulted with Member States within the Services Directive Expert Group. For more details, see the Annex and the Staff Working Document accompanying this Communication, SWD(2018) 236.
(31)
The first pillar of the retail restrictiveness indicator covers issues linked to retail establishment: specific conditions (such as size thresholds, location-specific rules, the level of detail in local planning requirements and the need for economic data) as well as procedures (number of permits and impacts assessments required, number of entities involved, length of the procedure and the publication of establishment decisions). The second pillar reflects restrictions on operations, such as shop opening hours, distribution channels for specific products, sales promotions, retail-specific taxes and fees and sourcing of products. The indicator constitutes a factual overview of restrictions in Member States. Rules on distribution channels for specific products, such as alcohol, tobacco and non-prescription medicines are included for the sake of completeness of the restrictiveness picture. This is without prejudice to the health and societal policy objectives pursued by Member States. The Commission shares these objectives and has developed dedicated policies and legislation, particularly on restriction of tobacco sales and advertising, and to guarantee high standards of quality and safety of medicinal products. It also supports Member States policies on the reduction of alcohol related harm.
(32)
See Commission Staff Working Document Public Consultation on Retail regulations in a multi-channel environment – Synopsis Report, SWD(2018) 237.
(33)
Restrictive rules on retail establishment have been raised in Country Specific Recommendations addressed to Belgium, Denmark, Finland, France, Germany, Hungary, Italy, Luxembourg and Spain.
(34)
Article 14 paragraph 5 of the Services Directive prohibits economic test making the granting of authorisation subject to proof of the existence of an economic need or market demand, an assessment of the potential or current economic effects of the activity or its appropriateness in relation to the economic planning objectives set by the competent authorities.
(35)
Economic needs test have been removed in Belgium, France, Luxembourg, Italy, the Netherlands, Romania and from the concerned regions of Spain. See SWD(2012) 148 final accompanying the Communication on the implementation of the Services Directive.
(36)
Launched in May 2016 with the Pact of Amsterdam .
(37)
https://ec.europa.eu/futurium/en/urban-agenda-eu/what-urban-agenda-eu .
(38)
Judgment of 30 January 2018, Visser, C-31/16, par. 124.
(39)
Article 15 of the Services Directive.
(40)
Such requirements reduce the ability to respond to changing consumer demands and can restrict the possibility for new retail to establish in vacant commercial locations, which runs contrary to the argument often advanced as a justification for regulating the location of shops.
(41)
Article 15 paragraph 3 of the Services Directive.
(42)
Judgment of 30 January 2018, Visser, C-31/16, par. 130.
(43)
Proposal for a Directive on a proportionality test before adoption of new regulation of professions, COM (2016) 822 final.
(44)
Proposal for a Directive laying down a notification procedure for authorisation schemes and requirements related to services, COM(2016) 821 final.
(45)
For example, in France shops larger than 1000 m² require a special authorisation. In Germany, such a threshold is set at 800 m², while Hungary fixes the threshold at 400 m².
(46)
See the Staff Working Document accompanying this Communication, SWD(2018) 236.
(47)
Article 8 of the Services Directive obliges Member States to ensure that all procedures and formalities relating to the access to a service activity and its exercise may be easily completed at a distance and by electronic means through the relevant point of single contact and with the relevant competent authorities.
(48)
EU eGovernment Action Plan 2016-2020, COM(2016) 179.
(49)
Proposal for a Regulation on establishing a single digital gateway to provide information, procedures, assistance and problem solving services and amending Regulation (EU) No 1024/2012, COM(2017) 256 final.
(50)
See Commission Staff Working Document Public Consultation on Retail regulations in a multi-channel environment – Synopsis Report, SWD(2018) 237.
(51)
Article 5 to 8 of the Services Directive relating to simplification of procedures, setting up Points of single contact, right to information and procedures by electronic means.
(52)
Article 13(3) Services Directive.
(53)
See Commission Staff Working Document Public Consultation on Retail regulations in a multi-channel environment – Synopsis Report, SWD(2018) 237.
(54)
See Commission Staff Working Document Public Consultation on Retail regulations in a multi-channel environment – Synopsis Report, SWD(2018) 237.
(55)
Restrictive rules on retail operations have been mentioned in Country Reports for Austria, Belgium, Finland, France, Germany, Hungary, Italy, Luxembourg, Portugal and Spain.
(56)
See Commission Staff Working Document Public Consultation on Retail regulations in a multi-channel environment – Synopsis Report, SWD(2018) 237.
(57)
Article 20 of the Services Directive prohibits that recipients of services are discriminated on the basis of their nationality or of their place of residence. Regulation (EU) 2018/302 of 28 February 2018 on geo-blocking prevents discrimination on access to prices, sales or payment conditions, when buying products and services from a website based in another Member State.
(58)
For instance, in some Member States the sale of non-prescription medicines is reserved to pharmacies. The Member States and the European Union have introduced legal provisions for the retail of non-prescription medicines sold online and off line in the light of their specific situation (e.g. role of the pharmacist in advising patients, control of the consumption, falsified medicines).
(59)
Directive (EU) 2015/720 of 29 April 2015 amending Directive 94/62/EC as regards reducing the consumption of lightweight plastic carrier bags.
(60)
Commission Communication - A European Strategy for Plastics in a Circular Economy – COM(2018) 28 final.
(61)
Proposal for a Directive of the European Parliament and of the Council amending Directive 2008/98/EC on waste, COM(2015) 595 final.
(62)
COM(2018) 173.
(63)
Commission Staff Working Document Public Consultation on Retail regulations in a multi-channel environment – Synopsis Report, SWD(2018) 237. Such constraints could also be described as contradictory to the principle of non-discrimination contained in Article 20 of the Services Directive that partitions the market based on nationality or place of residence.
(64)
On 31 May 2022, the validity period of the Commission Regulation relating to the exemptions of certain categories of vertical agreements and concerted practices will end (Regulation No. 330/2010 of 20 April 2010 on the application of Article 101(3) TFEU). It will need to be reviewed before its renewal. The accompanying Commission Guidelines on vertical restraints will also need to be reviewed at that time. The Geo-blocking Regulation enables customers to benefit from the same conditions as those customers located in the place of supply, for example, if they arranged collection of a delivery themselves. However, it excludes purchases for subsequent resale from its scope and would not apply if a supply contract is individually negotiated.
(65)
The draft paper ‘Towards a HLF Code of Good Practice in addressing ‘dual quality food’ forming the conclusions of the brainstorming session of the internal market subgroup of the High Level Forum for a better functioning food supply chain of December 2017, includes a call on the European Commission to assess the impact of so called ‘territorial supply constraints’ on consumer choice in various Member States. The final version should be endorsed in December 2018.
(66)
Cross-country differences, LE Europe, Spark Legal Network and Consultancy, VVA Consulting (2018) Operational restrictions in the retail sector, study carried out for the European Commission.
(67)
On average in the EU, micro retailers spend an equivalence of 3.3% of their turnover on regulation-related administrative tasks and equipment, whereas for small, medium and large companies it is up to 0.4%.
(68)
Good inspection practices can help deliver a thriving and growing economy whilst poorly conceived inspections place a considerable burden on business limiting economic growth, J. Monk, Reform of regulatory enforcement and inspections in OECD countries.
(69)
Commission Communication, "Better regulation for better results - An EU agenda", COM(2015) 215 final. In the case of retail, the use of the SME test in the impact assessment process is especially relevant.
(70)
European Commission, High Level Group on Retail Competitiveness (2015), Report of the preparatory working group on innovation; https://ec.europa.eu/growth/single-market/services/retail_en.