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Competitiveness & Fair Trade in Retail: EU Commission’s Strategy

By Leonardo Sforza, Managing Director, Brussels, MSLGROUP EMEA

The discovery of a cross-border fraud case around the mislabelling of processed meat is undermining consumer trust in prepared food industry. We wrote about it recently on Critical Conversations, click here to read it.

This case is also fuelling the debate at the European level about the effectiveness of current rules on food labelling and the traceability of food ingredients. A vast control plan throughout the 27 EU member states to detect fraud in the marketing of foods containing beef is under way, while mainly at retail level. And the results are being regularly reported to the Commission and via a “rapid alert system for food and feed” so that they can be used immediately by Member States authorities.

Meanwhile end of January, just few days before the eruption of the horse-meat scandal, the European Commission launched a “European Retail Action Plan” and a consultation process aiming to smooth the functioning of the retail sector and improve B2B trade relations within the food and non-food supply chain. We bring you our insights into the strategy and how it is expected to help brands in Europe. The recent cases of mislabelling of processed meat products and the trans-national nature of trade involved is likely to further influence the EU agenda in this area.

5 Key Priorities

The action plan of the EU Commission follows a strategy to improve the competitiveness of the retail sector and to enhance the sector’s economic, environmental and social performance.

Customer empowerment | Courtesy:  More Good Foundation via Flickr

Customer empowerment | Courtesy: More Good Foundation via Flickr

There are five key priorities being tackled through these actions, which will be implemented under the monitoring of a new permanent group on Retail Competitiveness, in which Member States and all interested parties, including SMEs, will participate. Here are the five priorities of the plan:

  1. Consumer empowerment with more transparent, more reliable and more directly comparable information on the price and quality of products.
  2. Improved access to more sustainable and competitive retail services through clearer and more transparent establishment rules
  3. Fairer and more sustainable trading relationships along the retail supply chain – the Consultation on unfair trading practices in the business-to-business food and nonfood supply chain is addressing this. Two other actions aim at reducing food waste and making the supply chains more sustainable through minimising energy consumption of retail outlets.
  4. More innovative solutions, one of the key axes of the plan, by examining the feasibility of setting up a dedicated database containing all EU and domestic food labelling rules and providing a simple way of identifying labelling requirements per product; taking measures to ensure better market integration for card, Internet and mobile payments (i.e. through the review of the EU legislation on Payment Services).
  5. Better working environments – both employees and employers will benefit from creating better working conditions and addressing mismatches between skills required and those available, particularly by identifying and anticipating skills needs through an EU Sectoral Skills Council and by improving retailers’ training and talent policies.

Unfair Trading Practices

Along the Action Plan, the EU Commission has launched a consultation on unfair trading practices in the business-to-business food and non-food supply chain.

The consultation will run until end of April 2013 and will examine the effectiveness of self-regulatory and legislative frameworks put in place to address those practices at national level. It will also look into the question of whether these divergent approaches may lead to a fragmentation of the single market.

In that sense, questions to stakeholders will include additional information on the size or frequency of these unfair practices (i.e. not providing enough information on contractual clauses, unilaterally or retroactively amending clauses or preventing contracting parties from getting supplies in other Member States). On the basis of the replies, an impact analysis should follow, while the EU Commission monitors the development of the action plan before its final report on the implementation in 2015.

Leonardo has 25 years of Brussels-based experience in addressing European Union policy issues and corporate strategies.  If you require assistance with policy intelligence and strategy, advocacy, communication and stakeholders outreach campaigns, connect with him leonardo.sforza@mslgroup.com or @JKL_Group

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