COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(91) 41 final 
Brussels, 11 March 1991. 
TOWARDS A SINGLE MARKET IN DISTRIBUTION 
Internal trade in the Community, the Commercial sector, 
and the Completion of the internal market. 
(Communication from the Commission) 
•m 
TOWARDS A SiNGŒ MARKET IN DISTRIBUTION 
Internal Trade In the Community, the commercial sector and the completion of the internal market 
r Table off Contents 
Summary 
Introduction - The Distributive Trades in Europe at the threshold off the Internal Market 
I Purpose of the Communication 
II The role of Commerce in modern economies and the need for balanced development of 
commerce and industry. 
III The Commercial Revolution in Europe (1950 -1990) 
IV Towards a European marketplace driven by commercial innovation. 
V Obstacles to internationalisation in distribution. 
VI The role of the Community 
The Programme off Work 
1 Working methods - consultation and dialogue 
1.1 Consulting the commercial professions. 
1.2 Cooperation with member states. 
1.3 Dialogue between social partners 
2 Transparency and understanding off Commercial Activity. 
2.1 The quantitative basis for understanding distribution. 
2.2 Understanding the legal and regulatory framework. 
2.3 Understanding the structural development of distribution. 
2.4 Raising the awareness of commercial firms. 
3 The legal framework for distribution at Community level. 
3.1 Improving conditions of access to the European market. 
3.2 Providing a set of rules for new forms of distribution without frontiers. 
3.3 Clarifying the legal framework for cooperation between firms. 
4 Application to the Distributive trades of Community policies for economic 
cohesion and development x 
4.1 
4.2 
4.3 
Conclusion Vocational training 
The structural funds 
Technological innovation in commercial firms 
Statistical annexe 
SUMMARY 
TOWARDS A SINGLE MARKET IN DISTRIBUTION 
Introduction - The Distributive Trades in Europe at the Threshold off the Internal Market 
I This Communication has been prepared in response to a Resolution off the CouncI dated 14th 
November 1989. 
H Commerce is indispensable to the efficient working of the market Sustained economic prosperity 
depends on a balanced development of productive and commercial activity. 
III Important changes in commercial methods, and in the structure of the commercial sector (which 
accounts for about 17% of output and employment), are now gathering pace throughout the EC. 
The last forty years have been seen first the emergence of very large vertically integrated retailers, 
especially in Northern Europe, and profound changes in the structure and role of the wholesale 
trade. The pace of change has been much less rapid in Southern Europe than in the North, and 
there are important differences in commercial structure between countries. 
IV Modern commercial methods, which are developing rapidly in response to the new technologies, 
place as much emphasis on the management of information within supply channels as on the 
management of goods. The approach of the single internal market has prompted an increase in 
cross-frontier initiatives by leading commercial firms. 
V Nevertheless, European commerce is still strongly partitioned on national lines; very few commercial 
firms hold significant market share outside their country of origin, and the failure rate of international 
initiatives by trading firms is high. The evolution of a single market in distribution, in which traders 
learn to do business across frontiers as readily as they do now within their country of origin, is 
crucial to the success of the Single Market. Small and medium sized firms in particular cannot 
penetrate new markets in the absence of a genuinely international distribution system. To some 
extent the obstacles to internationalisation are the natural consequence of the local character of 
service at the point of sale. But there are other obstacles arising from differences in regulation, in 
the structure off commerce, and in commercial methods which need to be identified and overcome. 
VI The programme off work presented in this Communication is design to improve understanding and 
awareness off these obstacles, and, sofer as possible to remove them. 
SUMMARY 
THE PROGRAMME OF WORK 
1. Working methods - consultation and dialogue 
The Committee for Commerce and Distribution (CCD) , created by the Commission in 1978 
(provisionally - definitively in 1981) is increasingly recognised as a valuable source off expert advice on 
technical issues in the preparation of proposals for Community legislation in such fields as the 
environment, consumer protection, means of payment and external trade. With the completion of the 
1985 White Paper programme, the focus of attention within the Community is shifting to broader social, 
economic and environmental objectives. This will imply an increasing role for the CCD and for the trade 
federations which undertake much of the detailed work on which its deliberations depend. 
Because of the predominant role of national and regional authorities in determining the business 
environment for Distribution there is a need for improved arrangements for consultation with and 
between member states. 
The Commission is encouraging a process of social dialogue between trade federations 
representing the retail and wholesale trades on one side, and trade unions representing employees in 
these sectors on the other. This consultative mechanism is particularly valuable as a forum for the 
examination of the impact of Community social policies on employment, training and other aspects of 
distribution. 
2. Transparency and understanding of commercial activity 
The Commission is planning a series of measures to raise awareness, in the commercial 
professions, in industry, and in national authorities, of the importance of commercial activity in the 
economy as a whole. Lines of action include : 
- A programme of action led by the Statistical Office of the EC to provide for the first time a 
reliable and comparable series of quantitative data on the commercial sector in the 
Community; 
- The creation of reliable sources of reference on national and community laws and regulations 
affecting commerce; 
- Improving the level of understanding and debate on distributive issues, both by means of the 
Commission's in-house research, and within University and other research centres specialising 
in commercial subjects. 
- Improving the quality of information supplied to the business community, both through the 
Commission's information activities and via the specialist press, on the commercial 
implications of Community policies; 
SUMMARY 
3. The legal framework for Distribution at Community Level 
Differences in national systems of regulation of trade may constitute potential obstacles to the 
internationalisation of the commercial sector. Any such difficulties are likely to increase as the process 
of integration proceeds. The Commission's aim is to anticipate problems before they arise and to 
encourage self regulation. Formal proposais for Directives and Regulations to eliminate such difficulties 
wfll be made only as a last resort 
The newly emerging Community wide market in mail order and telemarketing may require particular 
attention. 
Competition law, particularly as It relates to agreements between undertakings, may be a 
constraining factor in a situation where the nature of relationships is being transformed by the 
information revolution, and by the growth off knowledge-based business services. The Commission 
recognises the importance of ensuring that Community law in this field is clear, and clearly understood. 
4. Application to the distributive trades off Community policies for economic cohesion and 
development 
The commercial sector is a major employer of labour, much off it unskilled and/or part-time. 
Commercial change, coupled with demographic pressures, require new efforts in the field of vocational 
training. Community programmes provide many opportunities open to commercial firms. At the same 
time these programmes have in general been designed with the needs of the productive sector 
particularly in mind, and there is some evidence that existing opportunities are not sufficiently 
appreciated within the commercial sector. The Commission has decided that the retail trade will be the 
first sector to be examined within the context of its new programme for the development of vocational 
training within firms (FORCE), and preparatory work in this context will provide the basis for the 
development of future Community policy in this area. 
The structural funds, which exist to promote economic and social cohesion, have a limited role to 
play in assisting the process of commercial development, particularly in regions where the development 
of the productive base may be constrained by the inadequacy of existing distribution channels. 
Technology is driving a radical process of change in the nature of relations between firms. It is 
essential that this revolution in commercial methods should spread as rapidly as possible from large 
firms to the business community as a whole, and ffrom the prosperous regions of Northern Europe to 
the countries of Southern Europe, to the Eastern part of Germany and to rural areas. Differences In 
management styles and levels of development within the EC give rise to particular difficulties in 
developing the intimate links between firms that are characteristic of the most advanced commercial 
methods. The Commission is undertaking new work to identify these difficulties, with particular attention 
to the situation of small and medium sized firms, and to links across frontiers. 
TOWARDS A SINGLE MARKET IN DISTRIBUTION-
INTRODUCTION - THE DISTRIBUTIVE TRADES IN EUROPE ATTHE THRESHOLD OF 
THE SINGLE INTERNAL MARKET. 
I - Purpose of the Communication 
This Communication responds to a Resolution of the Council of Ministers dated 
14th November 1989. 
Recognising the important role which this sector will play in making a reality of the 
internal market, ministers invited the Commission to make suggestions for an 
approach to distribution which would fit into existing Community policies and would 
avoid creating new institutional structures. 
The structure of the Communication is determined by the guidelines established 
by the Council. This introduction considers the role of the distributive trades in the 
economy as a whole, and in particular within the context of the completion of the 
Internal Market. This analysis provides the background for a programme of work 
designed to ensure that the importance of distribution is properly reflected in the full 
range of community policies - for information, education, training, competition, 
innovation, structural funds as well as enterprise policy. 
II - The role of Commerce in modern economies and the need for balanced 
development of commerce and Industry. 
Trade is an indispensable aspect of economic activity. Almost all goods, and 
many services, pass from producer to consumer via some sort of process of trade 
and/or distribution. In the EC economy about 17% of output and employment arises 
in the trade and distribution sector (retail, wholesale and associated trades), and these 
trading activities constitute about one half of the "service" sector of the 
economy - (much of which is also engaged in facilitating trade). A succinct statistical 
overview of the Distributive Trades is at Annexe 1. 
Even these statistical measures do not take account of the sales, marketing and 
distribution activity of the productive sector. Trade needs to be considered not only 
as a sector but as a process or function within the economy. Neither commercial 
activity, nor productive activity are of economic value in themselves. It is only through 
the association of production with trade that the whole process of supply gives rise to 
value in the hands of the final user. 
Sustained economic prosperity depends on balanced and simultaneous 
development of the productive and trading functions. The success of the European 
and American economies in the 19th century, and the relative success of the 
economies of the Far East in more recent times both illustrate the importance of this 
balance. In contrast, the recent changes in Eastern Europe illustrate strikingly the 
failure of any productive system which is divorced from the discipline of the market, 
which alone ensures that the productive sector is responsive to the needs of the 
customer. 
The role of the commercial sector in encouraging this cooperation between 
suppliers and traders is especially important to the process of internationalisation of 
the European economy stemming from the completion of the internal market. This 
Communication emphasises in particular the importance of fostering links between 
firms in prosperous and less developed regions, between larger and smaller firms, and 
across frontiers. 
Ill - The Commercial Revolution In Europe (1950 -1990) 
Forty years ago the commercial sector, like much of industry, was highly 
fragmented, with very few large firms. There were clearly defined frontiers between 
the productive and distributive sectors and between wholesaling and retailing. In these 
circumstances commerce was generally regarded as a "passive" element in the 
economy, which responded to decisions taken by suppliers, and which had little 
decisive influence in determining the direction of economic development. 
During the last 40 years, the structure of commerce and commercial methods 
have undergone profound changes, a process which matches and complements the 
emergence of mass production industries. This process is continuing and even 
accelerating. The most visible development was the emergence of multiple general 
retailers operating through chains of shops, which are frequently large (supermarkets) 
and sometimes very large (hypermarkets). This process of concentration is frequently 
associated with a process of vertical integration in which the distinction between 
manufacturers, wholesalers and retailers becomes less easy to define. Many 
manufacturers developed extensive sales and distribution networks which took the 
place of conventional wholesalers, and in some cases including their own retail 
network. Similarly some retailers have acquired or created their own manufacturing 
capacity; more commonly they have created very close vertical links with suppliers 
involving close collaboration betwen suppliers and distributors but falling short of 
complete integration through common ownership of the entire supply chain. 
However, the pattern of commercial development differs markedly between 
product sectors and between different countries of the Community. 
So far as the retail trade is concerned, it is possible to distinguish three types of 
different retail structure in different areas of the Community. 
- Concentration in retailing, especially in food and other household goods is 
particularly strong in Germany, France and the United Kingdom, where the 
retail structure resembles that of North America. 
- In Denmark, Benelux and the industrial regions of Italy the same general 
trends can be observed, but the process of concentration and organisation 
has tended to occur further upstream. In these countries the development of 
very large supermarkets and hypermarkets has been relatively constrained, 
especially in the non-food sector, and the market share held by small firms is 
relatively high. 
- In Spain, Portugal, Greece, Ireland and rural areas of Italy the Commercial 
Revolution arrived later. Only in the late 1980's has there been a rapid 
development in large scale retailing in parts of these countries; and there are 
signs of continuing resistance to supermarket and hypermarket development. 
Although there has been steady growth in the market share of large and very 
large scale retail outlets, especially in Spain, some features of commercial 
development in these countries suggest that it may take a form more like that 
of the Netherlands and Denmark, rather than of the UK or France; that is to 
say that retailing may continue to operate through large numbers of small 
shops, and the process of concentration and organisation will occur further 
upstream. 
The wholesale trade shows the same markedly uneven pattern of development. 
Indeed specialisation and diversification in distribution upstream of the retailer is so 
complex that it is increasingly difficult to consider the wholesale trade as a single 
sub-sector. The traditional functions of warehousing and transportation of bulk goods 
have been overtaken everywhere by the commercial revolution, and it becomes 
increasingly difficult to distinguish "wholesalers" from such related businesses as : 
- Retail-like activities such as mail order houses, "cash and carry" wholesalers, 
and discount stores; 
- The upstream purchasing and logistics activities of major retailers; 
- The marketing, sales and distribution activities of manufacturing firms; 
- Suppliers of other commercial services such as physical distribution, 
marketing services, brokers, and commercial agents who facilitate and even 
generate trade, but without taking title to the merchandise traded. 
There are also substantial differences 'm structure within the wholesale sector 
depending on the type of goods traded: 
- Geographical variations m the structure of wholesaling In food and 
household goods are evidently closely related to the development of the 
retail sector described above. The wholesalers' traditional intermediary role 
has been severely squeezed wherever large-scale retailing has become the 
norm. In their place, new types of wholesaler-like commercial firms have 
emerged, including buying groups owned and operated in association by 
small retaHers, wholesaler owned "voluntary chains", other types of "associated 
trade" - including franchising and exclusive dealerships -, and various forms 
of (commercial agency. 
- Similar pressures have affected wholesalers of bulk raw materials and 
other inter-industry bulk goods as improvements in transport and 
communications have encouraged firms to trade directly with each other 
rather than through intermediaries. In many cases commercial aspects of 
such links are handled by supplier and customer firms, but the physical 
handling of merchandise is subcontracted to other operators. There is 
therefore an important developing role for physical distributors engaged in the 
sophisticated management of warehousing, transport and logistics. 
- Information on the distribution of Inter-industry manufactured goods, such 
as machinery, is very sparse. Most manufacturers in these product categories 
continue to rely chiefly on direct sales to the customer, either using their own sales 
force, or subcontracting to exclusive distributors or commercial agents. In the 
distribution of manufactured capital goods, especially goods incorporating 
advanced technology and requiring sophisticated after-sales support, the role of 
independent commercial firms appears to be significantly less important in Europe 
than in North America or in Japan. 
Because the retail trade is more clearly defined and more homogeneous than 
other types of distribution operating further upstream its workings are more visible and 
more widely understood. But the activities relating to consultation, communication, 
and study referred to in the work programme below will give as much attention to 
developments upstream of the point of sale for consumer goods, and to the 
distribution of intermediate and inter-industry goods as to the retail trade. 
IV - Towards a European market-place driven by commercial innovation 
In the last few years commerce has begun to harness technology to ensure that 
firms at every stage in the supply chain work in harmony so as to ensure that the 
productive process responds rapidly and flexibly to customer needs. Some leading 
retailers are now close to achieving a situation in which sales are registered 
automatically at electronic check-outs (EPOS), sales data is analyzed and 
communicated in real-time to central warehouses and manufacturers, and revised 
production and delivery schedules generated automatically at each level of the supply 
chain. 
One consequence of the automation of much of the traditional routine of relations 
between suppliers and traders is that managers recognise that cooperation between 
suppliers and distributors will allow a better flow of information on consumer 
requirements, and of new products to satisfy those requirements. Increasingly, 
commercial activity is concerned as much with the management of information within 
supply channels as with the management of goods. This applies to design and 
marketing knowhow as much as to information technology. The rapid growth of 
business format franchising, perhaps the most successful formula for transferring 
commercial know-how across frontiers, is a striking example of the growing 
importance of firms who specialise in coordinating all the activities necessary to 
successful trade - design, marketing, purchasing, physical distribution, training etc -
without themselves actuafly engaging in trade in the traditional sense. 
The business environment in this situation depends to an increasing extent on the 
links that are established between each firm and its suppliers and customers. Effective 
development of the internal market requires too that such links assume an international 
character; the approach of 1992 has indeed stimulated a growing interest in 
internationalisation in distribution, and the following approaches are all worthy of note: 
- Wholesaler owned voluntary chains include some of the largest and most 
international trading firms in the Community; 
- Many larger firms engaged in distribution have acquired holdings In, and in 
some cases control of companies in other countries. 
• A number of leading retailers have developed formal or informal alliances 
with retailers in other countries, with a view in particular to pooling expertise 
in the field of marketing and procurement; 
- Distance selling - mail order, television and telephone marketing and selling 
in the home - is for the time being relatively small (perhaps 2% of total retail 
sales with important differences between countries), but it is the first aspect 
of commerce that is developing into a truly international, cross-frontier market 
place, assisted by multilingual publishing and broadcasting, and other 
advances in technology. 
These various forms of internationalisation in distribution have the common feature 
that they are not in general available to small and medium sized commercial firms, 
whose main involvement in cross-border activities occurs within the context of rapid 
growth in business format franchising. This is only partly compensated for by the fact 
that physical distribution is increasingly separated from the process of trade, and 
supplied by specialist contractors not themselves involved in trade. 
V - Obstacles to internationalisation In Distribution 
These international initiatives in distribution represent as yet only the leading edge 
in commercial innovation, and are not representative of distribution in Europe as a 
whole. Not only are there important differences in the structure of Commerce between 
member states, but the distributive trades are also strongly partitioned on national 
lines. Success in the commercial sector depends on a firm's ability to provide reliable 
and flexible service at the point of sale; it is therefore not surprising that commercial 
firms have often found it difficult to achieve significant turnover, in terms of purchases 
as well as sales, outside their own country. Nearly all the leading commercial 
companies in Europe conduct most of their business within one, or at most two, 
member states; no commercial enterprise has established significant market share 
throughout the Community; the failure rate of international initiatives by trading firms 
is high. There are numerous examples of retail firms who have entered a foreign 
market, for example by buying a chain of shops, but who have subsequently 
discovered that their commercial methods and/or formats are not able to prosper in 
an environment - structural, cultural, and legal - different from that of their native 
country. The level of understanding of the process of completing the internal market 
appears to be lower in the commercial sector than in industry, especially among small 
and medium sized firms. 
The challenge for traders in the European economy of the 1990's will be to 
maintain their local roots, but at the same time to develop new marketing and 
procurement skills that will enable them to reach out and seize the opportunities 
represented by the expanding range of merchandise, at increasingly convergent 
prices, which will become available as the Single Market grows towards maturity. 
There is therefore a need to identify the obstacles to internationalisation in 
distribution as a first step to considering what role the Community may have in 
removing them. 
- Many obstacles to the free movement of goods and services, arising from 
differences in national laws and other regulations, are already being 
removed in the context of the programme for the completion of the internal 
market. In the work programme presented below the Commission proposes 
an approach to comparable obstacles that may persist in the distributive 
sector. 
- The existence of significantly different commercial structures within the 
Community may also constitute obstacles to internationalisation. For example 
countries with a fragmented retail structure may be less open to penetration 
by imported commercial formats and methods than where there is a more 
concentrated structure. Structural obstacles of this kind will diminish in time 
to the extent that the completion of the internal market encourages a process 
of convergence. But in the meantime suppliers and distributors can be 
encouraged to overcome these obstacles through improved information and 
training as to the realities of operating within the large European market. 
- Differences between the commercial methods of firms in different countries 
may also create obstacles to internationalisation, especially in establishing new 
links and networks across frontiers, which need to take account ofa wide 
variety of cultural, commercial and linguistic traditions. 
In this context, attention needs to be focused on the rapid change in commercial 
methods resulting from application of the new information and communications 
technologies. In the longer term these techniques have the capacity to bring about 
a transformation in relations between suppliers and distributors, and so by extension 
between the productive economy and the consumer. State of the art Electronic Point 
of Sale (EPOS) systems generate an item by item record, of all transactions and 
communicates this data to suppliers, transporters and intermediate distributors at 
every point in the supply chain. Expert systems interpret the data and translate it into 
useful information to provide the basis for management decisions. Orders, invoices, 
dispatch notes and other commercial paperwork can be generated automatically by 
computer and transmitted by electronic data interchange (EDI). 
But although the pace of change is rapid, and accelerating, among retailers in 
Northern Europe there are some indications that the pace of innovation is relatively 
slow in the wholesale trade, in small and medium sized firms, and in the commercial 
sector in Southern Europe. In other important respects the European retail trade is 
perhaps the most innovative and sophisticated in the world; by comparison, the retail 
trade in North America offers a narrower product range, and less flexible standards of 
service. Japanese retailing is still dominated by local family shopkeepers; indeed the 
Japanese authorities themselves recognise that the structure and behaviour of large 
commercial firms in Japan is a source of difficulty for exporters to Japan and has the 
effect of depriving the Japanese consumer of the range of choice available to 
consumers in other developed countries. 
But in the field of technical innovation there are signs that European distribution 
may not be keeping pace with developments elsewhere. In both the United States and 
Japan, inter-industry distribution is increasingly geared to automated logistics planned 
and operated on a continental basis. US manufacturers and retailers are ahead of 
European competitors in developing "quick response" systems that adjust production 
schedules in the light of real time data on sales. And despite the backward structure 
of retailing, Japanese retailers are beginning to achieve, in small local shops, 
standards of "just in time" logistics comparable to those which are confined in Europe 
to large vertically integrated mass retailers. 
In this limited sense, therefore, technical change is reinforcing the internal markets 
of our main industrial competitors in a manner which European efforts have not so far 
succeeded in matching. This problem does not appear to be related to the availability 
of systems or software, or to any failure in the process of technical harmonisation 
within the Community. On the contrary the Community has already played a key role 
in the worldwide development of commercial technology, for example by securing the 
adoption worldwide of the EAN standard for computer readable barcode numbering. 
This standard now forms the basis for the international development of Electronic Data 
Interchange (EDI) within the context of the TEDIS programme approved by the Council 
in 1987. Difficulties in implementing systems which are already widely available seem 
to be related to the existence of specifically European problems related to the nature 
of relations between firms. 
It is a paradox of the information revolution that by automating routine commercial 
communications between firms it creates a situation in which relationships between 
firms become increasingly sensitive to differences in culture and management style. 
By liberating management from routine, these methods give a competitive edge to 
firms with the commitment and skill to develop links of a synergetic character between 
supplier and customer firms. If American and Japanese firms appear to be more 
successful in this respect than their European competitors one explanation is related 
to the wide diversity of management style within European business deriving from 
linguistic and cultural differences, and from the markedly uneven level of economic 
development between different regions and countries of the Community. 
Once again small and medium sized firms are in a relatively less favourable 
position to cope with such obstacles, and there may be scope for action to overcome 
them within the context of community programmes for innovation and training. 
9 
VI The role of the Community 
The programme of work outlined below is designed to improve awareness and 
understanding of the role of distribution in the European economy and of the process 
of internationalisation associated with the completion of the internal market; to identify 
obstacles to this process, and, where possible, to make proposals for their removal. 
- Obstacles that may arise as a result of differences in regulations between 
Member States will be studied in consultation with the Distributive trades and 
Member States, with a view to finding ways of overcoming them; 
- Some convergence in commercial structures is a probable natural 
consequence of the evolution of the internal market. To assist this process 
the Commission is undertaking a series of studies and various information 
activities with a view to improving awareness of cxxnmercial structures and of 
the eBfficulties which may arise as a result of their variety; 
• As for commercial methods, Ctorronuruty potictes and programmes for 
vocational training, structural funds, enterprise policy and innovation already 
provide a framework within which the Commission is examining ways to 
ensure that the sector is property prepared for the challenge of the internal 
.'. inartoetr 
The role of the Community in the evolution of tha cornmerciai system is Iknited by 
the principle of the subskfcary character of Corrinr«jr% action. The process of 
commercial development and irtternaJfonaJIsation w# to a significant extent be carried 
forwjtfd naturally as businesses resporxi to The 
Community does however have a role to play in improving the quaftty of information 
awailabte to «mis on interra 
ensrironment - both at Corrtrrturuty level and within individual countries - does not inhibit 
the process, and by encouraging the involvement of commercial firms in initiatives 
taken within the context of Community policies for training, economic cohesion and 
innovation. 
10 
THE PROGRAMME OF WORK 
1. WORKING METHODS - CONSULTATION AND DIALOGUE 
By virtue of their intimate involvement in activity at all levels of the economy, 
manufacturing as well as commercial, traders have a potential interest in a very wide 
range of Community policies, by no means limited to issues directly affecting the 
operation of trade itself. Community rules in the field of competition, the environment, 
consumer protection, transport, financial institutions and taxation are all examples of 
policies which have already aroused considerable interest in commercial firms. 
Looking to the future, such issues as Economic and Monetary Union, Community wide 
banking, new means of payment, and rapid advances in telecommunications will all 
have important consequences for Distribution. There is a need for the Commission 
to ensure that the needs of commerce are properly reflected in all areas of the 
Commission's work. 
1.1 Consulting the commercial professions 
The Committee for Commerce and Distribution (CCD) was established by the 
Commission in 1978 (provisionally - definitively in 1981) as a means of ensuring 
improved consultation with the wide diversity of interests represented within the 
Commercial sector. 
The CCD includes representatives of the hotel, catering, advertising, and leasing 
sectors as well as franchisers, mail order houses, associated traders, wholesalers and 
retailers. Recently it has developed increasingly flexible and efficient working methods. 
The work of the Committee is organised into specialist groups, including external 
trade, economic affairs, means of payment, consumer affairs and the environment. 
Members of the CCD and their federations can call on extensive expertise on a wide 
range of topics. 
In some fields, such as consumer protection and the environment, and in 
response to the Council Resolution of 14 November 1989, a close and constructive 
relationship has been established between the specialist groups of the CCD and the 
responsible Commission services in such a way that Commercial firms are now 
actively involved in consultation leading to policy development - environmental issues 
such as waste management and packaging constitute one particularly constructive 
example. 
11 
1.2 Cooperation with Member States 
Large areas of legislation affecting the commercial sector remain wholly or partly 
within the competence of national or regional authorities. As the internationalisation 
of the Community economy proceeds in response to the completion of the internal 
market, these divergences in local and national policies are likely to be more acutely 
felt. This suggests a need to strengthen cooperation between the Community 
Institutions and Member States as well as between Member States themselves within 
the framework of the Group of Directors General responsible for internal trade, who 
should be encouraged to discuss with their colleagues and Commission staff any 
difficulties arising from differences in national regulation and to attempt some measure 
of coordination. This framework will also be used to support the programme of 
quantitative and qualitative studies described below, including the exchange of studies 
conducted at national level. 
1.3 Dialogue between social partners 
Within the framework of the Commission's activities designed to encourage social 
dialogue, the Confédération Européenne du Commerce du Détail (CECD) and the 
European Regional Organisation of the International Federation of Commercial, 
Clerical, Professional and Technical Employees (EUROFIET), adopted in 1988 a 
memorandum on vocational training. 
Following this agreement and the desire expressed by both organisations to 
pursue the dialogue, the Commission organised in 1990 a European Forum on Social 
Aspects of the Retail Trade. Among the conclusions of this forum, mention should be 
made of the creation of a structure for dialogue on certain aspects of the the social 
dialogue established for the industrial sector. 
Within this context further work is now in hand on vocational training, and has 
been extended to a general examination of the implications for retailing of 
demographic and employment developments. A Steering Group has been formed 
which will play an important consultative role in relation to Commission proposals 
relating to employment and working conditions in retailing. 
A similar process has been launched for the wholesale trade, and the social 
partners - the Federation of European Wholesale and International Trade Associations 
(FEWITA) and EUROFIET - are also focusing initially on issues related to vocational 
training. 
12 
2 TRANSPARENCY AND UNDERSTANDING OF COMMERCIAL ACTIVITY 
2.1 The quantitative basis for understanding distribution. 
The proper understanding of the role of distribution in the European economy is 
complicated by the poor quality of international statistics on distribution. Economic 
statistics are invariably collected at present by reference to product sector. But there 
are no statistics at international level collected by reference to the type of supply 
channel through which goods are distributed; nor are there, indeed, any internationally 
accepted definitions of the various types of commercial outlet - ("hypermarket", 
"supermarket", "voluntary chain"). An entirely new type of data, collected by reference 
to supply channel definitions - for which no agreed international classifications yet 
exist - will be required before it will be possible to make reliable statistical comparisons 
of distribution in different countries. 
The Commission has already adopted and transmitted to the Council a 
programme for the development of statistics for the service sector (COM (90)578 dated 
17th December 1990); within this context it is now setting in hand a work programme 
on commercial statistics with the aim of setting up an integrated system for the 
collection, processing and distribution of statistics comparable to the Community 
statistical system in other fields. Such a system will require close cooperation between 
the Statistical Office of the European Communities (SOEC) and national statistical 
Institutes, and arrangements for involving users in the development of the system. 
The Commission envisages that this system, when complete - a process which will 
take some years - will provide a comprehensive picture of the structure of and trends 
in distribution on an annual basis, supplemented by key indicators relevant to short 
term economic analysis, to be collected monthly or quarterly. It is intended that the 
collection of this data will include research data based on sampling methods as well 
as aggregate data from official sources. The aim will be to improve understanding of 
commercial behaviour and strategy as well as the measurement of economic 
aggregates. A proposal for a Council Directive setting out the legal basis for the first 
stage of this programme - the annual series - will be presented in the course of 1991. 
Further proposals may follow as the system develops. 
13 
2.2 Understanding the regulatory framework 
In its resolution of 14 November 1989 the Council called on the Commission to 
prepare and maintain a database covering the extensive volume of national and 
community laws and other measures affecting commercial activity. A contract has 
been placed with consultants for the first stage of work on this project, which is being 
carried out with the cooperation of National Administrations, and the results will be 
published in the first half of 1991. As requested by the Council these results will be 
made available to all users, in particular to national administrations and firms, and will 
provide the basis for discussions to be held in the framework of the Group of Directors 
General. The next step will be to investigate the extent to which divergences in 
national regulations may have the effect of slowing down the internationalisation of 
distribution. 
2.3 Understanding the structural development of distribution 
The Commission already has in hand a programme of studies designed to 
improve understanding of commercial activity and the commercial sector in Europe, 
with particular reference to the themes developed in this communication. Priority 
topics for study include: 
- The changing role of the wholesale trade especially in relation to the 
distribution of inter industry goods; 
- The impact of technology on commercial methods, on management 
development, on relations between distributors and producers and on the 
development of the new international market in distance selling; 
- The role and nature of "associated trade" (franchising, buying groups and 
voluntary chains), and other issues related to the situation of small and 
medium sized commercial firms; 
- Buôding on a study already completed on the retail trade in Eastern Europe 
further work to identify practical measures that could be taken, to encourage 
the efforts of EC commercial enterprises in relation to investment and training, 
and to support the efforts of new enterprises, and networks and federations 
of enterprises in Central Europe. (Technical assistance for distribution m 
Poland and Hungary is already envisaged within the PHARE programme). 
14 
It is satisfactory to note that the increasing importance of commercial activity for 
the European economy as a whole has already led to the emergence of a number of 
"centres of excellence" with expert knowledge of the distributive sector, at universities, 
business schools, and research centres throughout the Community. A number of 
initiatives have been set in hand to improve contact between these centres. The 
Commission is establishing contact with these emerging networks, and is examining 
how to encourage them within the context of programmes such as ERASMUS. The 
Commission also proposes to make the fullest possible use of these contacts in 
developing and executing the planned programme of work. 
2.4 Raising the awareness of commercial firms. 
The aim is to raise awareness on the part of Commerce as to the stakes involved 
in completing the internal market, and of the vital relationship between the accelerating 
revolution in commercial methods and the internationalisation of the market place . 
In addition to the Commission's offices and antenna in the Member States, which, 
among other roles, give global information on the Community and its policies, the 
Commission has established a network of information offices (Euro-Info-Centres) 
throughout the Community to ensure that businesses, and in particular small and 
medium sized firms, have reliable sources of information about Community and 
national markets, and about the process of completing the internal market. In the first 
phase of the development of this service, the emphasis has been placed on providing 
help for manufacturing firms. Experience shows that problems of distribution figure 
prominently in the preoccupations of manufacturing SME's who seek guidance at 
EIC's, and the Commission intends to improve the expertise of EIC staff in this 
domain. 
There is also a need to raise awareness at all levels of the Distributive Trades with 
respect to the international dimension of the commerce sector. The Commission has 
conducted a preliminary study of methods to achieve this objective and is considering 
the provision of an information service direct to the extensive professional press 
serving the Distributive Trades, so as to ensure a regular supply of news and ideas on 
Community developments for the non-specialist reader engaged in distribution. 
15 
3 THE LEGAL FRAMEWORK FOR DISTRIBUTION AT COMMUNITY LEVEL 
3.1 Improving conditions of access to the European market 
The legislative programme contained in the White Paper on completing the Internal 
Market focuses in particular on situations where differences in regulation at national 
level have the effect of creating obstacles to trade. Although most of these will directly 
affect the process of trade, only two proposals (relating to payment cards and to 
access to electronic networks), deal directly with distributive sector issues, and neither 
of these have been pursued in the form originally envisaged. National and local 
regulations affecting commercial activity are extensive and reflect the predominantly 
national or local character of the commercial sector. 
It follows that that there is no case for community legislation except in certain very 
limited cases where differences between national rules threatens to inhibit the 
internationalisation of the sector - and in particular where the marketing method is 
intrinsically transnational in character. 
Even in these cases the Commission considers that the process of trade should 
be subject to as few regulatory constraints as possible. The best approach may 
therefore be to use consultative mechanisms to explore the scope for solutions based 
on self regulation. This approach seems likely to prove particularly appropriate in 
dealing with new problems, where rapid changes in commercial methods and 
technology may give rise to a demand for regulation. 
A successful system of self regulation agreed at Community level requires the 
general acceptance by all practitioners of a generally accepted code of conduct and 
an effective mechanism for enforcement; this in turn requires the establishment and 
recognition of appropriate decision making authorities within the national and 
international federations concerned, and appropriate mechanisms for appeal; it also 
requires that such systems should be compatible with Community law including 
competition law. But self regulation is an approach that does not exclude action by 
the public authorities in cases where there is a clear public interest in ensuring agreed 
standards of conduct. Action may still be required if and when voluntary codes prove 
unable to resolve the problems. 
The Council Resolution of 14th November 1989 referred specifically to two such 
issues. The problem of pre-contractual preliminaries to the conclusion of franchise 
agreements has been addressed in a code of conduct which was adopted by the 
European Franchise Association in 1990. A similar approach is being adopted in 
16 
relation to electronic payments; Trade Federations representing financial institutions 
and retailers are working on codes of conduct governing the relations between card 
issues distributors and card holders in line with Commission Recommendations 
87/598/EEC and 88/590/EEC. 
3.2 Providing a set of rules for new forms of distribution without frontiers 
An area of obvious potential importance is the small but growing multinational 
market in distance selling based on new techniques of multilingual publishing, 
broadcasting and advertising. The Commission's aim in this area is to ensure that 
potential new barriers within the internal market are identified and dealt with. Because 
of the multinational character of the market the principle of subsidiarity may lead to the 
conclusion that if some sort of regulatory framework is needed, then it should from the 
outset be at Community level. Whether or not such regulation is required is open to 
debate. The Commission has already announced in its Action Plan for consumer 
protection policy (May 1990) that it is examining the desirability of extending the terms 
of Council Directive 85/577 on contracts negotiated away from business premises -
the so-called "doorstep-selling directive" - to telemarketing in general. Looking further 
ahead there may be a need to look at different possible approaches for licensing and 
for laying down standards of behaviour for sellers through telephone and television. 
Such standards are already envisaged in voluntary codes of conduct applicable in 
some member states, and focus in particular on the protection of individual privacy. 
In the same way, cross border payments raise issues on which any action 
required should obviously be taken at Community level. The Commission has 
identified in its Discussion Paper "Making payments in the Internal Market" a number 
of problems which are of particular concern to small firms making payments which are 
either made at irregular intervals or are small in amount or both. In such cases the 
cost of making and/or receiving the payment is often so large as to reduce or 
eliminate the profit margin on the transaction. In its efforts to promote the integration 
of Europe's payment systems, the Commission will continue to take into account the 
interests of the sector. 
17 
3.3 Clarifying the legal framework for cooperation between firms 
Commercial activity provides the essential mechanism for ensuring rapid and 
flexible response by suppliers to the development of customer needs. Competitivity 
at all levels of the supply chain is coming to depend more and more on the nature of 
links between firms. Furthermore, as a result of the new technologies, these links 
between firms depend increasingly on shared access to detailed management 
information. This transformation in commercial relationships may have implications for 
the application of Community rules on competition. 
Article 85 of the Treaty provides that agreements between undertakings which are 
designed to restrict competition are prohibited, but numerous agreements which do 
not have a restrictive object or effect fall outside the scope of Article 85(1); moreover 
exceptions to the general principle may be allowed in the case of any arrangement 
"which contributes to improving the production or distribution of goods or to promoting 
technical or economic progress, while allowing consumers a full share of the resulting 
benefit", and which fulfils the other conditions of Article 85(3). 
As the process of internationalisation in distribution gathers pace in response to 
the completion of the internal market, an increasing number of firms - especially small 
and medium sized businesses -, in both the commercial and the productive sectors, 
seem likely to find that the most effective way in which they can adjust their 
procurement and marketing strategies to the larger market will be by participating in 
some form of joint activity with other firms. Some such joint activities - for example 
exclusive distribution (Commission Regulation 1983/83), and franchising (Regulation 
4087/88) - are covered by block exemptions within the terms of Article 85(3); but 
others are not - for example, purchasing groups operated by wholesalers or on a 
cooperative basis for the benefit of small independent retailers, usually at a local level, 
which in many respects, particularly their use of retail brand names, resemble 
franchise agreements. 
Of course such agreements have an impact on competition, but they may at the 
same time be an essential precondition for the development of new distributive 
channels, which may be regarded as a source of economic benefit in the sense 
referred to in the text of Article 85(3) quoted above. In particular the further 
development of cross-frontier distribution possibilities is essential to creating a 
favourable economic environment for SME's. A manufacturing firm may well feel that 
it cannot undertake the risk of establishing multi-national distribution channels without 
the protection of an exclusive distribution agreement; a small shopkeeper may have 
18 
no access to potential new sources of supply outside his home country except by 
deploying management resources in cooperation with fellow shopkeepers; small firms 
may be quite unable to mount promotional activities on a national or international scale 
except in cooperation with other firms. 
Large commercial firms, too, may have an interest, especially in view of the wider 
range of merchandise likely to become available within the single market, in pooling 
their expertise in procurement, marketing, and other fields; various types of alliance 
across frontiers have recently emerged, and some of the larger wholesaler organised 
"voluntary chains" have been particularly successful at a multinational level. Although 
this type of association may also have the effect of opening up new supply channels, 
there is a need for particular vigilance in the application of competition rules in cases 
where the firms involved have substantial purchasing power. 
To enable businesses, and especially small and medium sized businesses, to 
develop sound strategies for extending their activities within the wider European 
market it is essential both that Community law should be clear, and widely understood, 
and that national competition authorities should work in accordance with principles that 
are consistent with those agreed at Community level. This issue is of growing 
importance. The Commission is therefore considering further clarification of its 
position on the compatibility with the competition rules of the arrangements mentioned 
above. 
4. APPLICATION TO THE DISTRIBUTIVE TRADES OF COMMUNITY POUCIES FOR 
ECONOMIC COHESION AND DEVELOPMENT 
Distribution impinges on all aspects of economic activity, and policies for 
distribution therefore need to focus not on commercial activity considered in isolation, 
but rather on the way in which distribution affects the economy as a whole. The, 
Commission considers that the importance of distribution needs to be properly 
recognised in the context of the full range of Community policies to encourage 
harmonious development, innovation, growth, and the reduction in disparities between 
regions within the Community. 
4.1 Vocational Training. 
The commercial revolution has had important - and in some ways unsatisfactory 
- implications for the structure and pattern of employment in distribution. On the one 
hand the process of automation affecting the basic tasks of accounting and 
stockkeeping is increasingly liberating management, especially in the larger firms, from 
19 
exclusive concentration on short-term issues and improving the returns from innovative 
approaches to management, marketing, design and strategic planning. 
On the other hand, while there has been an increase in the range and depth of 
skills at management level, the process of automation has also had the effect of 
reducing the skill content of jobs at entry level. Large scale distribution has come to 
rely increasingly on a relatively low-skilled workforce, much of it part-time or seasonal. 
Demographic developments, especially in Northern Europe, are already creating 
recruitment difficulties at this level. At the same time there is a growing need for larger 
numbers of trained personnel in junior management positions. Large companies are 
experiencing difficulty in attracting the right recruits. 
In the retail trade a high proportion of the workforce (70-80%) is female, and 
women are increasingly progressing from entry level to the lower levels of 
management, particularly in departments concerned with procurement, marketing and 
design. It is however disappointing to note that women appear in general to be no 
better represented at senior levels of management in distribution than in other sectors 
of the economy. 
Three separate factors - the completion of the internal market, the employment 
conditions in distribution noted above, and the accelerating pace of change in 
commercial methods resulting from technical progress - lead together to the 
conclusion that the distributive trades represent a particularly important target for the 
development of Community policies for vocational training. A rapid improvement in 
skills, knowledge and management techniques in distribution is a necessary condition 
for an adequate response to the new opportunities arising from the 1992 programme. 
Since 1986, when the Council adopted the COMETT programme to promote 
advanced training for technological change, there has been a rapid growth in 
Community efforts to promote training as an essential element in the economic 
development policies of the Community, with particular reference to technology 
(COMETT, EUROTECNET), languages (LINGUA), improved links and exchanges 
between Universities (ERASMUS), initial vocational training and international experience 
for young workers (PETRA) and training for women (IRIS). The DELTA programme 
investigates the application of information and communications technology to learning 
and investigates the conditions necessary to encourage retraining and management 
development in support of technical innovation. More recently the FORCE 
programme, adopted by the Council on 29th May 1990, opens the way to the 
development of a systematic policy for continuing education and training in firms. 
All these programmes have significant potential for the distributive trades, although 
most of them were designed with the needs of the productive sector principally in 
mind. But they have not in practice succeeded in attracting a sufficient level of interest 
20 
and participation from the distributive trades. It is significant in this context that in 
September 1990 CECD and EUROFIET agreed, with the Commission's blessing, to 
undertake certain activities relating to training in the retail sector. A major priority for 
the consultation and information activities proposed above must be to raise awareness 
in firms, in their federation training bodies and in public authorities (who are closely 
concerned with the detailed implementation of some Community and national training 
programmes) as to the importance of Community efforts in this field. The particular 
needs of small and medium sized firms also require special attention, an issue that 
was examined in the Commission's Communication of January 1990 on "Preparing 
SMES for 1992 - Experimental Training Schemes". 
The Commission has in any case decided that the retail trade is to be the first 
sector to be considered within the framework of the FORCE programme. In the first 
stage of work on FORCE the Commission, in partnership with CEDEFOP, is 
conducting an exhaustive survey of skills, skills needs, and continuing training plans 
within undertakings at all levels of the retail trade. This work, which will be completed 
in the course of 1991, will provide a firm basis for ensuring that the situation of the 
distributive sector is properly taken into account in developing policies and 
programmes for training. 
4.2 The structural funds 
The purpose of the Community structural funds (the Agricultural Guidance and 
Guarantee Fund - guidance section - the Social Fund and the Regional Development 
Fund) is to promote economic and social cohesion, in particular by programmes 
defined and approved jointly by national authorities and the Community, in support of 
disadvantaged regions or groups. 
The funds have a role to play in the modernisation of distribution, particularly in 
regions and sectors where the productive base is constrained by the inadequacy of 
distribution channels. For example the funds support action: 
- to ensure the continuity of basic services in remote rural areas; 
- to support the better integration of SME's in assisted regions into distribution 
and marketing networks, using, as an illustration, advanced services linked to 
telecommunications; 
- by supporting vocational training. 
21 
Recent Community initiatives of interest in this context include TELEMATIQUE for 
advanced services linked to telecommunications, LEADER for rural development, the 
NOW initiative for women, and EUROFORM for transnational training. 
In December 1990 the Commission approved a proposal by the Portuguese 
Government to allocate funds within FEDER for the modernisation of the Portugues 
distributive system, with particular emphasis on investment in technology and the 
development of frameworks for association between small firms. 
The existing budgetary framework governing the structural funds expires at the 
end of 1993, and the Commission is undertaking a review of their operation. 
4.3 Technological innovation in Commercial firms. 
The new information and communication technologies are bringing about profound 
changes in commercial methods, and, to ensure balanced and harmonious 
development of the European commercial system, it is essential that this process of 
innovation should be available to small and medium sized firms as well as large, and 
in the disadvantaged regions as well as in the more prosperous parts of the 
Community. 
There are significant elements, both within the Community's range of programmes 
for vocational training described above, and within programmes for the promotion of 
research, development and innovation, which impinge on these issues. At Community 
level the following initiatives are of particular interest: 
- The Strategic Programme for Innovation and Technology Transfer (SPRINT) 
focusses particularly on the need to make a commercial success out of 
technical opportunities. It is particularly concerned with the need to develop 
new products, processes and services in marketing terms, and so with the 
general issue of relations between firms. SPRINT is currently financing several 
projects dealing with user-supplier relations, just in time logistics and 
management development. A feasibility study is in hand for a large scale 
project for introduction of new technologies to support "rapid response" in the 
footwear sector. The same issues are under examination within the textile 
sector, in the context of a study launched at the initiative of the Commission's 
Directorate General for Industry and the Internal Market. 
- Within the IMPACT programme for information marketing, projects are under 
way relating to the application of advanced technology to logistical aspects of 
road haulage. 
22 
- Within the context of the TEDIS programme, which promotes Electronic Data 
Interchange, a legal advisory board is examining the changes in commercial 
law and procedures that will be necessary as a consequence of the move 
from conventional commercial paperwork to electronic communications, and 
in this context work is in hand on the development of a "model EDI 
agreement", a form of contract which could form the legal basis for electronic 
relations between firms; experimental initiatives have been launched on the 
effect of EDI on the relations between firms. 
- By its decision of 22 January 1990 the Council instructed the Commission 
to prepare policy proposals on the development of trans-European networks, 
including telecommunications and training networks, with particular reference 
to intercommunication and interoperability. In December 1990 the 
Commission approved a communication to the Council which lays emphasis 
on the importance for the internal market of developing truly transnational 
networks, with particular reference to transport, telecommunications, energy 
and vocational training. 
In developing an approach to innovation in the commercial sector, the 
Commission may also be able to draw on experience gained in the private sector and 
at national level. For example: 
- In commercial firms, a major issue in developing information in management 
systems is how to process and interpret the very large volume of data 
generated by point of sale systems so as to provide useful information in 
support of decision-making. This process of interpretation must of its nature 
incorporate assumptions of a subjective character; suppliers and distributors 
will each tend to interpret data from their own particular point of view, and the 
resulting differences in management outlook may be particularly difficult to 
manage where suppliers and distributors are working across frontiers, and in 
different languages. An interesting example is the system known as "Direct 
Product Profitability" (DPP) which analyses turnover and profit for each 
individual item handled. Some degree of convergence in approaches to 
analysis of this kind is necessary in order to create an environment favourable 
to the development of new commercial relationships, especially across 
frontiers. It is for this reason that there is a public and Community interest, 
and not merely a private commercial interest, in developing common 
approaches to advanced data-handling systems of this kind. 
- Within individual countries, initiatives are being launched by trade federations, 
and by publicly sponsored Chambers of Commerce to assist smaller firms in 
the commercial sector, and the associations within which they work, to match 
the progress in technical advance and management development being 
23 
achieved by larger firms. A particularly interesting example is the programme 
developed by the Italian Trades Confederations, Confcommercio, which is 
developing practical programmes for technical development and management 
training (including distance training), and including arrangements for technical 
and financial assistance to participating firms. 
It is now becoming urgent to bring these different strands together and address 
the problem directly. The Commission therefore proposes to set in hand an 
examination of these and other related developments using the consultative 
mechanisms for commerce described above and the management committees for the 
Community programmes principally concerned (particularly SPRINT and TEDIS). The 
object will be to identify the obstacles to the penetration of commercial technology. 
Particular attention will be focused on the use of technology by small and medium 
sized commercial firms, to the technical links between commercial firms and smaller 
manufacturing firms, and to commercial links between firms across frontiers. The aim 
will be to arrive at concrete proposals for action such as: 
- public sector initiatives to encourage investment in management 
development in commercial SME's aiming at overcoming the psychological 
and other obstacles to innovation. 
- public sector support of efforts within firms to encourage consistency in 
commercial procedures, including technical standards, at an international level. 
Conclusion 
This Communication has provided an overview of issues for the distributive trades 
which arise in the context of the completion of the internal market, and of 
developments in hand, in the context of a wide range of Community policies, to ensure 
that distribution in the 1990*s assumes an increasingly transnational character. Further 
proposals wiH be brought forward in due course as the programme of work develops, 
particularly as regards the legal framework, vocational training and technology. 
24 
TOWARDS A SINGLE MARKET IN DISTRIBUTION" 
STATISTICAL ANNEXE 
The quality of statistical information on the Distributive Trades is not at present sufficient to 
provide more than a general overview of the situation of and trends in distribution. Statistical 
difficulties arise in particular because economic data is normally collected in accordance with 
product category definitions (NACE); reliable distribution statistics will require the collection of date 
according to supply channel definitions, for which no internationally recognised classifications exist. 
The picture is further complicated by the rapid changes in commercial structure and methods 
described in the Communication (Sections 1.2 and 1.3) which make it increasingly difficult to define 
clear frontiers (for example between wholesaling and retailing) within distribution, and between 
distribution and industry (for example between wholesaling and the commercial and distribution 
functions of manufacturing firms). 
The situation is still further confused by the existence of many small owner-managed firms, of 
self-employment, and of casual and seasonal employment. 
Table 1 provides an estimate of the importance of the distributive trades in the Economy as a 
whole. Tables 2 and 3 provides estimates of employment. Table 2 is limited to wage and salary 
earners only, and table 3, taken from a recent academic study, illustrates, for a few countries only, 
the relative importance of the self-employed, who are not included in table 2. 
Table 1 
Share off value-added for the distributive trades (1) in total output/ 
Part de la valeur ajoutée du commerce dans la production totale 
(%) 
Belgique 
Danmarke 
BR Oeutschland 
Hellas 
Espana 
France 
Ireland 
Italia 
Luxembourg 
Nederland 
Portugal 
United 
Kingdom 
EC 
11) At factor cost. É 
12) Including recove 
Source : Eurostat. Wholesale and retail 
trade services (2)/ 
Commerce de gros et de détail 
1980 
15.02 
14.28 
12.18 
12.88 
14.72 
13.43 
10.87 
17.08 
15.51 
13.37 
18.00 
11.59 
13.54 
nsemble des facteur* 
y and repairs. Y cor 1986 
16.92 
15.31 
11.24 
13.73 
14.25 
13.34 
11.49 
17.19 
15.79 
13.21 
16.82 
13.32 
13.59 
i 
npris la récupère Lodging and 
catering services/ 
Cafés, hotels, restaurants 
1980 
3.03 
1.28 
1.52 
N/A 
4.15 
2.42 
2.33 
2.83 
2.55 
1.86 
3.16 
1.72 
2.59 
ition et la répara 1986 
3.28 
1.47 
1.63 
N/A 
6.68 
2.89 
2.32 
3.59 
1.99 
1.92 
3.61 
1.98 
2.57 
tion Total 
1980 
18.05 
15.56 
13.70 
15.47 
18.87 
15.85 
13.20 
19.91 
18.06 
15.23 
21.16 
13.31 
16.13 1986 
20.20 
16.78 
12.87 
16.30 
20.93 
16.23 
13.81 
20.78 
17.78 
15.13 
20.43 
15.30 
16.16 
25 
Table 2 
Number of wage and salary earners in the distributive trades, 1988 
Nombre de personnes occupées dans le commerce en 1988 
Wholesale/ 
Commerce 
de gros Scrap and 
waste 
materials/ 
Matériaux de 
récupération Agents/ 
Agents 
commerciaux Retail/ 
Commerce 
de détail Hotels and 
catering/ 
Cafés, hotels, 
restaurants Repairs/ 
Réparation Total 
distributive 
trades/ 
Total distribution Total economy 
employment/ 
Total des 
emplois dans 
l'économie Distribution 
as share of 
total/ 
Part de la 
distribution 
Belgique (1) 
Danmarke (1) 
BR Deutschland 
Hellas (1) 
Espana (1) 
France 
Ireland 
Italia (2) 
Luxembourg 
Portugal 
Nederiand (1) 
United Kingdom (1) 
EC (12) 
Share of the Total 
Economy/Part dans 
toute l'économie 164 112 
152 675 
953192 
89 362 
262 200 
837 000 
37 800 
673 412 
8600 
62 750 
276 700 
928 201 
4446 004 
3.96 4 045 
2004 
25 379 
1 564 
5400 
18 700 
0 
N/A 
0200 
1000 
6500 
21 702 
100 494 
0.09 N/A 
(E) 3 123 
5 410 
188 508 
15 517 
141600 
54 300 
0 700 
N/A 
0500 
1000 
6500 
28 478 
485 636 
0.43 N/A 
(E) 164 992 
174 742 
1 757 340 
325 193 
527 400 
1386 500 
67 100 
656 816 
14 200 
197 871 
361 100 
2 110 490 
7 743 744 
6.90 65 524 
52 587 
458 795 
160 143 
318 600 
460 700 
35 000 
N/A 
6400 
86 000 
85 200 
1 036 982 
3 365 431 
3.00 (E) 35 000 
15050 
310 200 
69 557 
128 100 
123 000 
6600 
N/A 
0500 
167 812 
54 600 
244 235 
336 624 
1.19 (E) 436 796 
402 468 
3 693 414 
661 336 
1 256 200 
2 881 000 
147 200 
2 292 400 
30 400 
516 433 
790 700 
4 370 086 
17 478 433 
15.58 (E) 
(E) 3 046 797 
2 412 200 
23 348 000 
3 587 662 
7896 699 
18 097 000 
823 600 
22 924 000 
154 100 
3 649 000 
4 631 500 
21 574 926 
112 145 484 
100 14.34 
16.68 
15.82 
18.43 
15.91 
15.92 
17.87 
10.00 
19.73 
14.15 
17.07 
20.26 
15.58 
Sources : Eurostat except for Kaly/Eurostat à l'exception de l'Italie 
1) Data for 1987/Données pour 1987 
2) Data prepared by Centra di Studi sul Commercio (CESCOM), Bocconi University, Italy 
E) Approximate estJmate./Donnée approximative. 
Table 3 
Employees and self-employed In Distributive Trades/ 
Salariés et travailleurs Indépendants dans la distribution 
1987 
Retail/Commerce de détail Wholesale/Commerce de gros 
Self-employed/ 
Indépendants Employees/ 
Salariés Total Self-employed 
Indépendants Employees 
Salariés Total 
Belgique 
France 
Kalia 
Nederiand 
UK(1) 93 935 
476 400 
1 614 714 
11900 
2990 000 164 992 
1 149 900 
656 816 
381 402 
470 000 263 927 
1626 300 
2 271 530 
493 302 
3460 000 28 807 
15 400 
478 958 
25 600 
N/A 164 112 
876 500 
673 412 
297 999 
N/A 192 819 
951 900 
1 152 370 
322 189 
N/A 
1) Figures for total of distributive trades only/Total distribution tous secteurs confondus. 
2) Source CESCOM (Milan, I), 1RS (Stirling, UK) and EIM (Zbetemeer, NL). 
The following tables illustrate some other important features of Distribution referred to in the Memorandum. 
Table 4 
RETAIL SALES VALUE AS A PERCENTAGE OF CONSUMER EXPENDITURE 
1982/1987 
% DES VENTES AU DETAIL DANS LA CONSOMMATION DES MENAGES 
1982 1987 
——— i . i .il —.— i • II -»—— i i 
Hellas 62.0 62.0 
Portugal 59.0 55.5 
Italia 58.5 53.5 
Espana 55.0 52.0 
Belgique 44.8 44.0 
France 44.6 43.0 
BR Deutschiand 41.9 41.6 
Nederiand 44.4 40.7 
UK 41.4 40.5 
Danmarke 40.0 38.0 
Source : Euromonitor. 
Table 5 
NUMBER OF RETAIL OUTLETS AND SHOP DENSITY 1987/ 
NOMBRE DE POINTS DE VENTE ET DENSITE 
Espana 
Hellas 
Belgique 
Nederiand 
France 
Danmarke 
Kalia 
Ireland 
Portugal 
UK 
BR Deutschiand YEAR/ANNEE 
1985 
1984 
1987 
1988 
1988 
1985 
1987 
1977 
1976 
1984 
1986 OUTLETS (000s)/ 
POINTS DE VENTE 
(en milliers) 
739.9 
185.0 
114.0 
158.0 
590.0 
48.7 
533.4 
31.3 
81.0 
343.2 
310.0 DENSITY 
19.2 
18.7 
11.5 
10.8 
10.5 
9.5 
9.3 
9.2 
9.0 
6.1 
5.1 
Notes: Density: outlets per thousand head of population. 
Densité: nombre de magasins pour 1000 habitants 
27 
Table 6 
FOOD RETAILING 1987/COMMERCE DE DETAIL ALIMENTAIRE 
Share of hypermarkets (%)/ Share of supermarkets (%)/ 
% des hypermarchés % des supermarchés 
Countries with high concentration 
in food retailing/ 
Pays à forte concentration dans le 
commerce do détail alimentaire 
France 39 41 | 
Belgique 18 58 1 
Nederlandss 4 54 I 
UK 24 31 1 
BR Deutschiand 18 35 I 
Countries wtlh low concentration 
In food retailing/ 
IPays à faible concentration dans le 
commerce de détail alimentaire 
Espana 16 20 
Italia 2 23 
Danmarke 0 N/A 
Portugal 3 N/A 
Hellas 0 N/A 
Ireland 0 N/A 
Source : AC Nielsen Company. 
Table 7 
RETAIL TRADE BY ORGANIZATION (1)/FOR M ES DE COMMERCE DE DETAIL 
Year/Année Cooperatives Department 
and variety 
stores and 
mailorder/ 
Grands 
magasins et 
magasins 
populaires et 
vente par 
correspondance Multiples/ 
Commerces 
à 
succursales 
multiples Affiliations/ 
Commerce 
affiliés Independents/ 
Indépendants Total 
Belgique 
Danmarke 
Espana 
France 
Ireland 
Nederiand 
Portugal 
UK 1983 
1984 
1984 
1983 
1984 
1985 
1984 
1984 N/A 
16 
3 
3 
1 
N/A 
4 
5 7 
N/A 
5 
8 
8 
2 
40 
18 15 
28 
10 
25 
34 
27 
40 
47 9 
56 
8 
16 
7 
34 
4 
5 56 
74 
48 
50 
37 
52 
25 100 
100 
100 
100 
100 
100 
100 
'.OC 
(1) Cooperatives - cooperative societies; multiples - including hypermarket chains; Affiliations - voluntary chains and buying group 
members; Independents - non-affiliated retailers. 
Source: Euromonitor. 
Coopératives - succursales multiples y compris les hypermarchés; commerces affiliés - chaînes volontaires et groupements d'achats; 
indépendants • commerces non-affiliés. 
28 
Table 8 
MAIL ORDER MARKET SHARE OF TOTAL RETAILING 1982 -1987/ 
PART DE LA VENTE PAR CORRESPONDANCE DANS LE TOTAL DU COMMERCE DE DETAIL 
% 1982 1987 
Belgique 1.3 1.4 
Danmarke 1.6 2.0 
France 2.4 2.7 
Kalia 0.4 0.4 
Nederiand 1.3 1.7 
Espana N/A 0.2 
UK 3.5 3.4 
BR Deutschiand 5.7 5T 
Source : EuromonKor. 
Table 9 
MARKET SHARE OF BUYING GROUPS AND VOLUNTARY CHAINS/ 
% DES GROUPEMENTS D'ACHATS ET DES CHAÎNES VOLONTAIRES 
1982 1988 
Belgique N/A 11 
Danmarke 33 33 
Rnland N/A 40 
Nederiand 33 32 
Norway 27 24 
Espana 2 4 
Sweden 35 36 
BR Deutschiand 40 39 
Source: Euromonitor 
TABLE 10 
BUSINESS FORMAT FRANCHISING/ 
FRANCHISE 
Belgique 
Danmarke 
France 
Kalia 
Nederiand 
UK 
BR 
Deutschiand Number of franchising/Nbre de 
franchiseurs 
1985 
72 
N/A 
456 
79 
216 
N/A 
N/A 1988 
77 
8 
675 
197 
248 
270 
180 Number off franchised 
outtets/Nbre de franchisés 
1985 
3035 
N/A 
19 687 
8024 
6747 
N/A 
N/A 1968 
4045 
25 
29.698 
11.500 
8332 
20 000 
9000 Value of saies (Billion ECU)/ 
Valeur des ventes (en millions 
d'ECUs) 
1985 
2.48 
N/A 
12.17 
2.11 
4.3 
N/A 
N/A 1988 
2.85 
N/A 
13.15 
2.93 
5.4 
5.63 
4.8 
Source : European Franchising Federations. 
29 
Table 11 
MAJOR RETAIL-BASED ORGANIZATIONS IN EUROPE/ 
CLASSEMENT DES PLUS GRANDES ENTREPRISES DU COMMERCE DE DETAIL EN EUROPE 
Company 
Metro 
Tengelmann 
Leclerc 
Intermarché 
Carrefour 
J. Sainsbury 
Albrecht 
Rewe-Leibbrand 
Marks & Spencer 
Vendex International 
Tesco 
Asko-Massa Group 
Karstadt 
Migros 
Gateway 
Promodès 
Ahold 
Otto Versand 
ICA 
Co-op AG 
Au Printemps Groupe 
Schickedanz-Quelle 
Argyll 
Kesko 
KF Konsum 
Co-op Schweitz 
Auchan 
Casino 
Delhaize le Lion 
Euromarché Groupe 
Sears 
Boots 
ASDA 
Kingfisher 
Gus 
GIB 
C&A Brenninkmeyer 
FDB/Brugsen 
Co-op Kalia 
Cora 
System U Turnover 1988/89 
(million ECU) 
17 108 
16 873 
10 159 
9522 
8900 
8885 
8 584(1) 
7857 
7 714 
7 497 
7 105 
7039 
6895 
6 875 
6 807 
6563 
6544 
6 411 
6 331 
6 026 
5 795 
5 708 
5566 
5467 
5090 
5 021 
4 899(2) 
4854 
4854 
4 410 
4 075 
4 072 
4066 
4066 
3955 
3 916 
3 836 (2) 
3 748 (2) 
3 708 
3 553(1) 
3 521 (2) Domestic base 
Germany 
Germany 
France 
France 
France 
UK 
Germany 
Germany 
UK 
Netherlands 
UK 
Germany 
Germany 
Switzerland 
UK 
France 
Netherlands 
Germany 
Sweden 
Germany 
France 
Germany 
UK 
Rnland 
Sweden 
Switzerland 
France 
France 
Belgium 
France 
UK 
UK 
UK 
UK 
UK 
Belgium 
Germany 
Denmark 
Italy 
France 
France 
(1) Estimate/Donnée estimée. 
(2) 1987 
Source : Institute for Retail Studies, Stirling University. 
FINANCIAL STATEMENT 
1 BUDGET HEADINGS CONCERNED 
B 5-320 Business promotion (SME's) (Formerly B 7770) 
B 5-322 Operations relating to the Distributive Trades (Formerly B 7772) 
EXPENDITURE DERIVING FROM THE DEQSIONS LAID BEFORE THE COMMISSION (indicative 
figures depending on budget funds available) 
i | i 
1991 1992 1993 
1 450 000 1 250 000 1 250 000 
These figures cover all activities mentioned in sections 1,2 and 3 of the work programme including 
work on statistics that is already in hand, but excluding additional expenditure that may be required in 
the context of the forthcoming proposal for a Council Directive relating to Commerce statistics (Para 
2.1). They do not cover additional actions that may be required as a result of the development of the 
work programme, which will be the subject of separate proposals, as necessary. 
3 OTHER FINANCIAL REPERCUSSIONS 
Measures to encourage vocational training already authorised within appropriate budget lines, and 
especially the FORCE programme. Any additional expenditure required will be the subject of separate 
proposals. The initial phase of work in support of innovation and technical change (para 4.3) will involve 
initial expenditure on studies whose cost is not expected to exceed 500 000 ECU'S. The source of 
funding for this initial phase has not yet been decided, but could be accommodated within the budget 
lines for Enterprise Policy mentioned at 1 above. Any further expenditure which may prove necessary 
will be the subject of separate proposals. 
-J4-
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