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EuroCommerce reminds that restricting access to the Single Market will not improve the situation for farmers.
The association clarifies the fact that “European retail alliances mostly deal with large international suppliers of processed products, which tend to hold strong market positions in their product categories. These global suppliers continue to make significant margins and benefit from the Single Market for their own sourcing and production”.
EuroCommerce, Press release of 8 February 2024
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EuroCommerce urged the European Commission to take action against French rules on B2B commercial relations and lodged a formal complaint against French ‘Descrozaille’ law.
“This prevents retailers and wholesalers […] from benefiting from economies of scale in the Single Market and deprives consumers of the benefits that pan-European sourcing brings in the form of a broader selection of goods at more affordable prices.”
EuroCommerce, Press release of 14 December 2023
- The European Commission commissioned a study published in 2020 showing that territorial supply restrictions in the EU cause a consumer welfare loss of at least €14 billion per year.
European Commission, Study on territorial supply constraints in the EU retail sector (2020)
- The European Commission’s Joint Research Centre reported on retail alliances and their impact on the food supply chain in 2020. It concluded that there is an overall agreement that Retail Alliances are able to generate benefits for retailers that increase their competitiveness in a competitive, consolidating and internationalizing market, and that at least part of the benefits generated by Retail Alliances are likely passed on to consumers where there is sufficient downstream competition.
Joint Research Centre, Retail alliances in the agricultural and food supply chain (2020)
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Territorial Supply Constraints prevent retailers to sufficiently supply broader variety of products and thus consumers from a wider choice and lower prices.
European Commission, Antitrust: Commission fines AB InBev €200 million for restricting cross-border sales of beer
- The Belgian Competition Authority published a report on recent trends in FMCG prices in Belgium, in comparison with the Netherlands, France and Germany.
It identifies that territorial supply constraints “(i.e. multinational firms supplying identical or very similar products at different prices to retailers across countries, typically in the disadvantage of relatively small countries like Belgium) remain an important topic to keep on the (Belgian and EU) policy agenda”.
Belgian Competition Authority, Press Release 4/2024 of 25 January 2024
- The Dutch Government also published in 2023 a study on territorial supply constraints and their consequences for consumers.
It is recognised that Retailers in Netherlands see it as a business solution to buy through a joint purchasing organization.
Ministry of Economic Affairs and Climate of Netherlands, Territorial supply restrictions (2023)
- The comparison of EBITDA ratio shows that large manufacturers enjoy a profitability that is 3 times higher than that of European food retailers (~22.2% vs. 6.3%).
McKinsey & EuroCommerce, The State of Grocery Retail – 2023 – Europe | section 3
- Recently, the European Commission itself has started to create with Member States purchasing alliances for vaccines and gas, so as to create more leverage in negotiations with large suppliers and obtain more affordable prices.
European Commission, A strategic gas alliance between the EU & the US Coronavirus: Inclusive Vaccine Alliance