Territorial supply constraints have been afflicting retailers and wholesalers for years, says Eurocommerce, the principal European organisation representing the retail and wholesale sector. It refers to a practice to fragment the Single Market to enforce different prices across countries and ensure that products cannot be sold in a market for which they are not intended. Usually, this translates into limitations on languages used on labels, or different packaging sizes or colours for the same product. These practices are costing European consumers at least 14 billion euros every year, across four product categories, according to a European Commission study. This is hard to defend given the current cost of living crisis.
Therefore, Eurocommerce is calling on the European Commission to “close the gap”. It says that competition rules may catch dominant large manufacturers. But they do not catch those not-dominant players that are still able to deliberately fragment the Single Market, for example, by using national sales offices to stop cross-border sales.
It urges the European Commission to swiftly start an impact assessment and propose legislation, for instance using the non-discrimination principle in the Geo-blocking Regulation to apply to business-to-business transactions. In a fully functioning Single Market, suppliers should be obliged to offer their products to all customers regardless of their country of origin. Retailers and wholesalers should be able to choose where in the EU they want to buy their products, just like individual consumers, and other economic sectors, can do already today.