Polish wholesaler Eurocash Group has welcomed the decision of the General Court of the European Union to reject the European Commission's classification of a proposed retail tax as 'state aid'.
The proposed tax, which was to be applied to large scale retailers – those posting monthly revenues of over 170 million zlotys (€39.6 million) – was blocked by the European Commission in 2017, however the Court's ruling means that it could now potentially be implemented.
Commenting on the Court's decision, Jacek Owczarek, Eurocash financial director, said, "We believe that for many of our clients the decision of the European Union General Court regarding the tax on retail sales is positive.
"The introduction of this tax is intended to support small enterprises, which is consistent with our mission."
Eurocash, which operates the ABC, Delikatesy Centrum and Mila brands, among others, as well as supplying to thousands of independent stores around Poland, added that its has developed its business over the past 20 years to 'support independent entrepreneurs in the fight against aggressively competing discount and hypermarket chains'.
"These networks have always had access to know-how, financial backing or support from many global manufacturers," Owczarek added.
"We, along with several of our wholesale competitors, have been struggling for years with better purchasing conditions for our clients. We invest in innovation, develop ourselves, achieve economies of scale, provide entrepreneurs with marketing support or education. The decision of the EU Court means that independent entrepreneurs will now receive additional support."
Owczarek noted that it was likely that Eurocash itself would likely be subject to such a tax, which could amount to around PLN 30 million per year (€6.97 million).
In its ruling, the General Court of the European Union ruled that the European Commission's assessment of the retail tax was incorrect, saying "the Commission was not entitled to infer solely from the progressive structure of the new tax on the retail sector that that tax entailed selective advantages".
The Court's decision does not mean that the retail tax is now legally binding, however, and Poland's Finance Ministry spokesman Pawel Jurek said earlier this week that it would remain suspended until at least the end of this year.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Jana Zimmermann. Click subscribe to sign up to ESM: The European Supermarket Magazine.