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EuroCommerce Calls On EU To Act On Big Brands' Fragmentation Of The Market

Published on May 24 2018 10:58 AM in Supply Chain tagged: EuroCommerce / Big Brands / Supply Constraints

EuroCommerce Calls On EU To Act On Big Brands' Fragmentation Of The Market

Retail representative group EuroCommerce argued for the EU to act on big brands’ fragmentation of the European market.

Director-General Verschueren made the argument on the launch of the Benelux study on territorial supply constraints, which examined the restrictions enforced by suppliers of products on retailers, preventing them from sourcing centrally or buying in the country of their choice.

The study found that 77% of retailers asked saw territorial supply constraints as raising prices for consumers, and 67% as restricting their ability to offer their customers the full range of products the brands sell elsewhere.

Worrying Trend

Verschueren said, “The Benelux study just published provides further evidence of a worrying trend for all those who care about the single market and the interests of consumers.

“Big brands are breaking up the single market, using their dominant position to force retailers and wholesalers to buy products only in the country in which they operate; and they are doing so to maximise their already considerable profits at the expense of consumers. This is a little-known issue which needs to be addressed as a matter of urgency.”

Potential Pilot

EuroCommerce believes that the Benelux report has potential to act as an ‘important pilot’ for EU action. It noted a Commission communication on the European retail sector produced last month, which highlighted the problem of territorial supply constraints as one to be further investigated.

Verschueren added, “Large multinationals operate on a global scale and sell freely across Europe, yet partition national markets to prevent retailers using the single market to get the best prices and best products for their customers.

“This contrast between manufacturers exploiting the full benefits of the single market for themselves, and restricting it for retailers, is costing consumers millions of euros every day. We will be working with the Commission and our national members to see this change, and change soon.”

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O'Sullivan. Click subscribe to sign up to ESM: European Supermarket Magazine.

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