GREEN PAPER ON COMMERCE
Date: 1996-11-20
Institutions: European Commission
Subjects: communications policy, freedom to provide services, marketing, single market, theory of marketing

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  20.11.1996 
COM(96)  530  final 

GREEN  PAPER 

ON 

COMMERCE 

(presented  by the Commission) 

TABLE OF  CONTENTS 

I-  INTRODUCTION 

II-  STRUCTURE  AND  DEVELOPMENT  OF  COMMERCE 

1-  Economie  and  social  importance  of  commerce 

2-  Concentration  and  Competition  in  commerce 

3-  The development  of  independent  organised  commerce 

4-  The development  of  the Single  Market  and  internationalisation 

4.1-  Cross-border  trading  in  the  Single  Market 

4.2-  Cross-border  trading  with  countries  outside  the  EU 

III-  THE  ROLE  OF  AND  ACTION  UNDERTAKEN  BY  THE  MEMBER  STATES 
AND  THE  EU  RELATING  TO  COMMERCE 

1- Actions  undertaken  by the Member  States 

2-  Role  and  actions  of  the  EU 

2.1-  Actions  in  support  of  commerce 

2.2-  The  consultative  framework 

IV-  NEW  CHALLENGES  FACING  COMMERCE 

1-  Ensuring  the  effectiveness  of the  Single  Market 

1.1-  Barriers  to  the  Single  Market 

1.2-  Consumers'  concerns 

1.3-  The  introduction  of  the  euro 

2-  Enterprise  environment 

2.1-  Administrative  burdens  and  simplification  of  legislation 

2.2-  Training 

2.3-  Statistical  information 

3-  Employment,  competitiveness  and  cohesion 

3.1-  The  rural  environment 

3.2-  The  urban  environment 

4-  The Information  Society  and  Commerce 

V-  OPTIONS  FOR  THE  FUTURE 

/  <7K 

ANNEXES 

ANNEX  A:  Statistics 

ANNEX  B:  Areas  directly  concerning  commerce  subject  to  national  legislation 

ANNEX  C:  A  detailed  list  of  community  legislative  measures 

ANNEX  D:  Various  actions  at  community  level  affecting  commerce 

ANNEX  E:  Institutional  addresses 

ib 

I-  INTRODUCTION 

1- Every  day,  almost  370  million  EU  citizens  consume  and  use  goods  -  food,  clothes, 
furniture,  books,  cars, computers  - produced  by  the  58  million  people  employed  in 
agriculture  and  manufacturing  throughout  the  EU,  as well  as  millions  more  beyond.  But  it 
is thanks  to  the  22  million  people  employed  in  commerce  within  the  EU  that  its  citizens 
are  able  to  access  this  vast  range  of  products  where  and  when  they  want,  at  affordable 
prices  and  accompanied  by  service.  Commerce  is the  gate  through  which  a wealth  of  goods 
from  other  countries  enters  the  domestic  market  and  thus  expands  the  variety  of  items  on 
offer.  This  applies  not  only  to  goods  from  third  countries  but  also to  goods  from  other 
Member  States  which  have  benefited  from  the  development  of  the  Internal  Market. 

2-  This  vital  economic  sector,  the  second  largest  in the  Community,  approaches  the 
millennium  facing  several  challenges  which  must  be  addressed  immediately  if  it  is to 
maintain  its  contribution  to  the  economic  and  social  well-being  of  our  citizens. 

3-  These  challenges  include  the  increased  competition  arising  from  opportunities  to  trade 
across  the  whole  territory  of  the  Single  Market;  the  constraints  on  developing  the  full 
potential  of  the  Single  Market  from  heterogeneous  regulations  on  a national,  regional  or 
local  level;  the  introduction  of  a  single  currency  which  will  provide  immediate  advantages 
but  offer  also  several  practical  challenges  specific  to  the  sector;  the  evolving  relationship 
between  consumers  and  suppliers; the  continuing  restructuring  of  the  sector  in  order  to 
adjust  to  the  competitive  environment  and  its  effect  on  communities  dependant  on  or  served 
by  the  existing  structures;  the  need  to  provide  an  environment  in which  enterprises  can 
flourish;  the  rapid  expansion  of  the  use  of  existing  technology  and  the  exploitation  of  new 
technology  to  streamline  service  and  facilitate  new  forms  of  direct  trading;  the  need  to 
maintain  a competitive  European  industry  in the  light  of  globalisation  of  commerce  via  the 
information  society  revolution  (electronic  commerce). 

4*" Despite  its place  at  the  heart  of  the  economy,  the  sector  suffers  from  a  lack  of  readily 
available  information  and  analytical  data.  Since  rapid  transfer  of  information  is 
fundamental  to  maintaining  competivity  and  adjusting  to  market  trends  this  gap  must  be 
filled. 

5-  For  activities  which  impinge  so  directly  on  the  everyday  lives  of  people,  the  commerce 
sector  appears  to  have  been  taken  for  granted.  The  time  is right  to  initiate  a  full 
consultation  on  the  challenges  facing  commerce  and  the  possible  options  for  meeting  these 
challenges.  This  Green  Paper  is  designed  to  launch  the  consultation  process. 

6-  The  terms  "commerce"  and  "distribution"  are  often  used  as  synonyms  although  the 
former  is  sometimes  regarded  as  referring  more  to  the  selling  aspect  and  the  latter  more  to 
the  logistical  angle.  In  this  paper  the  term  "commerce"  is used  to  refer  to  both  kinds  of 
activities  and  in  particular  to  wholesale  and  retail  trade.  The  commerce  sector  dealt  with 
in  this  paper  covers  all  trading  activity  from  the  purchase  of  goods  from  the  producer  to  the 
delivery  of  these  goods  to  the  final  consumer.  The  paper  does  not  deal  specifically  with  the 
trade  in  services,  although  mention  is made  of  some  services  which  are  directly  concerned 
with  traded  products  e.g.  tourism/crafts. 

1 C^ 

O B J E C T I V ES  OF  T HE  G R E EN 

P A P ER 

7-  The  aim  of  this  Green  Paper  on  Commerce  is  to  stimulate  considered  discussion  on  the 
importance  of  this sector of the economy  and the challenges that face  it on the eve of the 21st 
century: 
• 
• 
• 

it  examines  the  structure  and  development  of  commerce  . 
it  describes  the  actions  of  Member  States  and the  EU  and their  respective  roles. 
it  identifies  the  challenges  facing  the  sector  and  raises  issues  which  require  public 
consultation. 

8- The  discussion  arising from the  Green  Paper  should  lead  to the identification  of  actions  by 
the entreprises themselves, by public administrations in the Member  States or by the EU which 
will  assist the  sector  to  meet  the  challenges  while  remaining  competitive  and  contributing  to 
employment  and  social  cohesion. 

II-  STRUCTURE  AND  DEVELOPMENT  OF  COMMERCE 

1- Economic  and  social  importance  of  commerce 

9-  Commerce  is the  second largest area of economic activity  within the  European  Union.  It is 
an  essential  component  in  measuring  the  level  and  strength  of  a national  economy  and  a  key 
sector for generating employment opportunities and growth.  Yet, alongside its purely economic 
functions,  commerce  has  important  social  functions.  It  is  a point  of  contact  between  citizens 
and their local community and provides the latest information  on life style, cultural patterns and 
community  activity.  As  a  major  determinant  on  social  and  cultural  patterns,  lifestyles  and 
physical  planning,  commerce  is  pivotal  to  the  European  socio-economic  model.  The  social 
integrating  function  of  commerce  might  gain  further  importance  in  the  future  due  to  the 
progressive  ageing  of  the  European  population! 

10- The prosperity  of  commerce has important  ramifications  for jobs throughout  the EU:  over 
22 million people  in the EU work  in commerce  - almost  16% of total EU  employment.  In  10 
years,  between  1982  to  1992,  commerce  created  about  2.3  millions jobs  in  the  15  Member 
states, a growth  of  12 %  . In the  same period,  total  employment  in the  EU  increased  by  7 %. 
Commercé thus  created  a  significantly  higher  proportion  of jobs  than  the total  economy.  The 
growth  of  trade  employment,  i.e.  the  rate  of  creation  of  new jobs,  has  differed  between  the 
Member  States':  Spain,  +  25%, Netherlands  +  23%, Austria  +  20%,  Italy  +  15%,  Germany 
+  14%,  United  Kingdom  +  10%,  France  +  1%.  The  figures  vary  greatly  from  one  Member 
State to another,  and one of the points for debate following publication of this Green Paper  will 

be  to  analyse  the  reasons  for  such  variations2. 

11-  Commerce's  contribution  to  the  GDP  of  the  EU  economy  remained  stable  from  1982  to 
1992, at about  13%. During this period, the average GDP and the value added of the  commerce 
sector grew at the  same pace, by about  25%.  Productivity  in commerce  increased  around  13%, 
in  these ten  years. 

Commerce  ,  second  largest  employer  in  the  EU3  in  1994  : 

4.5  million  commercial  enterprises 
one  third  of  all  EU  enterprises,  95% of  which  contain  fewer  than  10  employees 
22  million  jobs 
16%  of  the  EU  workforce 
55%  of  persons  employed  in  retail  trade  are  women 
3.4  million  retailing  enterprises  employing  15 million  people 
1.1  million  wholesaling  enterprises  providing  7 million jobs 
13%  on  average  of  added  value  in  the  EU  economy 

12-  Women  represent  a  significant  proportion  of  the  labour  force  in the  retail  sector,  making 
up  55% of  those  working  in  retail  trade.  This has  been  instrumental  in providing  entry  to  the 
labour  market  for  many  women.  The  distributive  trades  also  contain  a  high  number  of  part 
time jobs.  However,  whilst  many  women  are  willing  to  accept  part-time  work  as  a means  of 
reconciling  work  and  family  responsibilities,  one  third  of  women  working  part-time  do  so 
because  the  ûill-time job  opportunities  which  they  would  prefer  are  not  available.  It  is  worth 
noting  that  in  recent  years  there  has  been  an  increase  in  part-time  work  in  many  Member 
States,  in  the  retail  sector  as  in  others.  Greater  use  of  part-time  work  can  be  beneficial  to 
employers  and  employees: it can enable employers to be more  flexible,  while  shorter  working 
hours  suit  many  employees.  However,  it  is  important  to  ensure  that  those  who  work  shorter 
hours  are  given  comparable  treatment  to  those  in  full-time  employment.Negotiations  at 
European  level  have  recently  begun  between the social partners on  flexibility  of working  time 
and  security  of  employment.  These  are  expected  to  cover  part-time  work. 

13-  Commerce  also  offers  the  opportunity  to  European  citizens  to  create  and  run  their  own 
enterprise,  usually  after  first  gaining  experience  in  a commercial  firm.  The  small  amount  of 
capital  necessary  to  set up a commercial  enterprise relative to that required  by other  economic 
activities  contributes  greatly  to  this  opportunity  afforded  by  commerce. 

14- Commerce covers all trading  activity  from  the purchase of goods from  the producer  to the 
delivery  of  these  goods  to  the  final  consumer.  Traders  have  a  crucial  task  of  responding  to 
consumer  demand  and  thus  enhancing  their  profitability.  Developments  in  recent  years  have 
resulted  in a marked  increase in the influence  of commerce on manufacturers,  with  competing 

2  A  1994 Report  on Employment  Performance  by Mc Kinsey Global Institute  identifies  weak  performance 
in job  creation  in  Europe  vis-a-vis  the  US and  concludes  that  the  reasons  are  entry  barriers.  These 
conclusions  merit further  reflection. 

3  EUROSTAT  data:  see  annex  A 

operators joining  forces  in  order  to  negotiate  with  manufacturers  from  a position  of  strength. 

15- The daily contact between traders and their clients enables the former  to adapt to and  better 
satisfy  demand  by  keeping  to  a minimum  unsold  goods  and therefore  any  waste  of  factors  of 
production.  Commerce  has  therefore  an  important  contribution  to  make  in  promoting  the 
efficient  use  of  resources  and  accordingly  encouraging  sustainable  development.  In  addition, 
through their intermediate position the commerce sector is able to influence  both  manufacturers 
and  consumers. They  can encourage manufacturers to develop and produce  "greener" products, 
while  they  can  play  a  significant  role  in  providing  environmental  information  to  consumers. 
This  involves the  development  of flexible  partnerships with both consumers  and  suppliers and 
a  constant  evolution  of  the  regulatory  framework  aimed  at  ensuring  an  acceptable  balance 
between  the  legitimate  interests  of  the  traders  and  the  legitimate  interests  of  the  consumers. 

16-  There  is  growing  recognition  of  the  pivotal  role  played  by  commerce  in  maintaining  a 
balanced community  life, be it in city centres, or local, neighbourhood  shops in both urban  and 
rural  areas.  A  lively  local  commercial  centre  often  doubles  up  as  the  cultural  centre  of  a 
community,  giving  commerce  an  important  socially  cohesive  function.  Shops, be  they  large 
or  small,  bring  life  to  town  centres  and  inhibit  the  growing  problem  of  urban  desertification, 
which  encourages  the  spread  of  crime. 

17-  Commerce  also  performs  an  important  socio-economic  function  by  serving  as  a  medium 
through  which  people  meet,  communicate,  socialise  and  interact.  It  serves  as  an  interface  not 
just between different  sectors and groups within societies but between different  nations, cultures 
and  countries.  At  a  personal  level,  for  many  people,  shopping  is  not  merely  a  chore  but  an 
enjoyable,  social  activity,  not least because of the efforts  made by traders to make  it so and to 
stimulate  demand.  For  many,  especially  the elderly  or those  living  alone,  shops, in  particular 
local  stores,  may  provide  their  only  regular  source  of  contact  and  conversation  with  other 
people  and  the  outside  world. 

2-  Concentration  and  Competition  in  commerce 

18-  With  the  aim  of  modernising,  commerce  has placed  much  emphasis  on concentration  and 
internationalisation. In its  1991 Communication "Towards a Single Market in Distribution"4 the 
Commission  drew  attention  to concentration  as one  of the phenomena  likely  to  be  accelerated 
by the creation  of the  internal  market and which affects  wholesaling, retailing and  wholesaling 
to industrial consumers alike. This is confirmed  in the Commission recent  study  "Effectiveness 
and  Impact  of  Internal  Market  Integration  on  the  Organisation  and  Performance  of 
Distribution" 

19-  Concentration  in  commerce  appears  to  be  irreversible  in  all  Member  States  but  is  much 
more  developed  in  those  in  the  North compared  to  those  in  the  south,  particularly  as  regards 
For  example,  in  1994, the  six  major  retail  self-service  food  outlets  in  each 
the  food  sector. 
Member  State accounted  for  a significant  market share in general food  sales: 57% in Germany, 
61%  in Belgium,  35% in Spain,  67% in France,  39% in Greece, 28% in Italy.  In  Finland,  the 

4  Commission  Communication  "Towards a Single market in Distribution" COM (91)41  final of  11.03.1991 

s  "Effectiveness  and  Impact  of  Internal  Market  Integration  on  the  Organisation  and  Performance  of 

Distribution",  European  Commission,  Directorate  General  XV,  1996. 

major  retail  food  group  accounts  for  40% market  share,  and  the  three  big  retail  food  groups 
account for  80%.These trends are also influenced  by factors  such as  the increase in the number 
of  women  in paid  employment,  private  car  ownership  and  the  development  of  infrastructure. 

20-  The  negative  effect  of  this  development  could  be  the  possibility  of  establishing  de  facto 
vertical  integration  or the dependency  of the manufacturer  on retaining  a single client.  This in 
turn prevents the manufacturer  seeking other clients or new distributors competing for  supplies. 
For  smaller  distributors  with  an  insignificant  market  share  this  also prevents  them  purchasing 
similar goods at similar prices. Concentration might also encourage manufacturers  with  market 
power  to  exploit  weaker  buyers  by  raising prices, thus  diminishing  their  competitiveness  and 
accelerating  the  process  of  concentration  on  the  retail  level. 

21- This process of concentration  is only part of the larger debate concerning relations between 
commerce  and  industry  and  the  competition  rules  existing  between  them.  This  debate  is  now 
open  in  many  Member  States  and  will  be  developed  at  EU  level.  The  result  of  this  trend 
towards concentration  has reinforced  the hand of major  distributors vis-a-vis their suppliers and 
encouraged  the  development  of  distributor  own  brands.  Another  important  indication  is  the 
creation  since  the  early  1980s  of  buying  alliances  at  national,  European  or  even  global  level, 
which have  led to  a  growth  in the power  of large  distribution  groups,  integrated  or  otherwise, 
and  to  sometimes  rather  strained  relations  between  producers  and  traders. 

22-  Ensuring  competitive  markets  within  commerce,  as  in  other  parts  of  the  economy,  is  an 
important  tool  in the  battle against rising prices and benefits  the consumer.  On the  other  hand 
concentration  of  market  share  in  the  hands  of  a  few  firms  can  reduce  the  potential  influence 
of the consumer  as regards, e.g.  product  range, choice  of outlet  (location  of  stores), or  market 
signals. Competition rules play an important role for commerce. Of special interest are the rules 
concerning  franchising,  exclusive  purchasing  and  selling  and  on  selective  distribution. 

3-  The  development  of  independent  organised  commerce 

23-  In order to remain  competitive  on the market and maintain their market  share, commercial 
Small  and  Medium  Sized  Enterprises  (SMEs)  are  increasingly  working  together  in  associated 
networks  in  the  form  of  cooperation  between  retailers,  such  as  buying  groups  and  voluntary 
chains  of  one  or  more  wholesalers  and  several  retailers  or  in  franchise  chains.  This 
phenomenon  is  more  marked  in  the  non-Mediterranean  Member  States.  Concentration  is  no 
stranger to these forms of commercial co-operation. This form of supply, known as independent 
organised commerce, is becoming increasingly widespread in the EU.  Organisation along these 
lines combines the flexibility  and service of small shops whilst offering  the benefits  of  efficient 
logistics associated with larger structures. However the form  in which such concentrations  arise 
may  give rise to  questions  about  their  compatibility  with  competition  rules  inside the  Union. 

24-  Co-operation  enables  heads  of  a  small  firm  to  enter  a  decision-making  forum,  to  have 
contacts with other  sole traders confronted  by the same issues, to benefit  from  training  and  the 
support  of  similar  professionals  based  on  a  real  common  interest,  notably  within  a  common 
buying structure and  sales and marketing policy which allows them to attain a sufficient  critical 
mass. These  competitive  advantages  compensate  for  the  partial  loss of  autonomy  by  the  head 
of a small firm,  in particular  as regards the upstream part of the distribution  chain, that  is their 
suppliers. 

25-  It would be wrong to believe that independent  commerce  is condemned  to disappear  in the 
face of competition from  large integrated firms. Certainly, the commercial revolution unleashed 
in the Northern Member  States has been accompanied by a trend towards concentration and the 
development  of  large  integrated  firms,  but the overall  trend  is not that  of the disappearance  of 
independent  traders  who are often  associated to them  through  various  forms  of  contracts  such 
as  franchising. 

26-  The  emergence  of  independent  organised  commerce  is  arguably  the  most  important 
development  to  have  taken  place  in  the  commercial  world  since  the  advent  of  large  scale 
distribution.  Today, this kind of commerce represents 22% of retail  sales in Germany  and 40% 
in the Netherlands.  Franchise networks alone account for  8% of retail turnover  in France (30% 
in  the  United  States). 

4-  The  development  of  the  Single  Market  and  internationalisation 

4.1-  Cross-border  trading  in  the  Single  Market 

27-  The  most  obvious  characteristic  of  the  retail  trade  is  its  dépendance  on  local  outlets  and 
its  need  to take  account  of  local  preferences  and  prejudices.  This explains  the  very  important 
part  played  in  maintaining  a  healthy  enterprise  environment  of  national,  regional  or  local 
regulations.  It  also  explains  to  a  large  extent  the  mechanisms  used  by  commerce  to  supply 
customers  directly  in  other  Member  States. 

28- The principle mechanism for establishing  a presence in other Member  States used by retail 
companies  is  by  becoming  majority  share  holders  in  local  distribution  companies.  This  has 
been  especially  prevalent  during  the  last ten  years  in the  Southern  Member  States:  by  1994, 
virtually  all  Spanish  hypermarkets  were  in  the  hands  of  companies  mainly  or  partially 
controlled  by  capital  based  in  other  Member  States.  A  similar  situation  prevails  in  Portugal 
and  Greece  and takeover  and  merger  activity  is continuing.  Some  large  retail  enterprises  have 
also  established  a  direct  presence  by  opening  stores  but  this  is  still  relatively  rare.  Another 
mechanism  is  by  the  establishmemt  of  voluntary  chains  supported  by  wholesalers,  franchise 
chains  and  buying  groups,  uniting  large  numbers  of  commercial  SMEs. 

29-  On the wholesale side the picture  is different  because wholesalers are not  so tightly  linked 
to  local  outlets.  A  study  undertaken  by  the  Commission6  in  1993  demonstrated  this  and 
underlined  that a distinction must be made between the internationalisation  of wholesaling  and 
that  of  retailing.  As  regards  wholesaling,  the  cross-border  dimension  is  an  integral  part  of 
in  distribution  channels. 
strategies 
Internationalisation  of  wholesaling  is occurring  in  all  sectors  (food,  non-food,  inter-industry) 
and  has important  consequences  for  producers,  acting  as a counterweight  to the trend  towards 
concentration  in production  brought  about  by the  need  to  supply  larger  markets, and  enabling 
SMEs  involved  in  production  to  access  markets  beyond  their  national  frontiers. 

to  structural  changes 

implemented 

response 

in 

30-  The  internationalisation  of  retailing  as  far  as  the  establishment  of  shops  is  concerned  is 
currently  more  limited  to  certain  large  retail  groups  which  are  big  enough,  and  possess  the 

"Foreign investments in retailing and wholesaling in the EC", 1993:  Commerce and Distribution  Series, 
DG  XXIII 

techniques  necessary,  to  take  advantage  of  international  markets  and  adapt  to  their  particular 
characteristics.  Indeed  one  of  the  spin-off  developments  is  the  acquisition  of  know-how  on 
servicing  different  consumption  patterns.  This  move  is  likely  to  continue  given  that  the 
attainment  of  a critical  mass achieved  as a result of cooperation  of SMEs or  concentration,  the 
globalisation  of  markets  and  the  relative  saturation  of  domestic  markets  encourage  operators 
to  internationalise.  Opportunities  should  remain  available  for  smaller  companies  looking  for 
niche  markets  through  interactive  websites on the  Internet. 

31-  Though  some  retailers have  expanded  outside their  home market  to  other  Member  States, 
the  large  majority  stays  within  the  home  market  as  far  as  Europe  is  concerned.  Cultural 
differences  are likely  to persist and will continue to restrict the organic expansion of  firms  and 
retail  formats  outside  national  territories.  Franchise  chains, however,  which  link  local  traders 
to  an  international  concept  continue  to  develop  and  are  certainly  an  important  element  in  the 
Europeanisation  of  commerce.  Nevertheless,  significant  price  differences  continue  to  exist 
between the Member  States which implies that the internationalisation of brand names does not 
necessarily  lead to internationalisation of supply, nor does it produce convergence  in prices  for 
the  consumer. 

31a- The  localisation  of retail outlets will  become  less important  to cross-border trading  when 
transport  across  frontiers  becomes  a  significantly  smaller  element  in the cost  of products.  The 
Commission proposals on improving  transport  infrastructure  particularly  as regards the Trans-
European-Network  is  important  in  this  respect. 

4.2-  Cross-border  trading with  countries  outside  the  EU 

32-  The  same  general  trends  as can  be  observed  in cross-border  trading  inside the  EU  can  be 
observed  for  selling  outside  the  Union.  In  effect  wholesaling  has  shown  an  immediate  move 
into  establishing  a  presence  in  European  non-Member  States  and  even  into  the  US  and  Asia 
whereas export  of the retail  function  has not followed  this expansion. On the other hand  easier 
access to  information  and the availability  of goods on the international  market via audio  visual 
and  infoiixiation  networks  is stimulating  local  demand  which  often  can  only  be  supplied  from 
outside the consumers home territory.  This  is a challenge  for electronic  commerce  which  must 
be  fac^J  u.^ntly  by  the  EU. 

33-  The  modernisation  of  commerce  in the  Central  and  Eastern  European  Countries  (CEEC), 
is  important  for  promoting  the  economic  integration  of  the  countries.  On  the  proposal  of  the 
Committee  on  Commerce  and  Distribution,  three panels of professionals  were  created  in  1995 
and  visited  Russia,  Ukraine  and  Hungary,  to  identify  the  main  problems  facing  commerce  in 
these countries and to determine the areas in which the professionals and their federations  could 
help  them.  New  missions will  be  set  up  in  1996,  as  far  as  possible  in  liaison  with  the  Phare 
and  Tacis  programmes,  in  particular,  to  co-finance  management  training  and  technical 
assistance  to  develop  logistical  distribution  structures  adapted  to  local  needs. 

34-  A  similar  method  could  be  used  in  order  to  reinforce  historical  links  between  the 
distribution systems of the Mediterranean littoral states.  Such actions for training and technical 
assistance could  be  inserted  into the  framework  of the  "Barcelona  Declaration"  adopted  at the 

See  Annex  D  -"Transport 

policy" 

Euro-Mediterranean  Conference  of  17-18 November  1995. 

35- A number of questions arise about the consequences of internationalisation  for  commercial 
enterprises.  It  is  notably  the  case  of  the  influence  of  national  regulations  on  commerce, 
guarantee  and  after  sales  service.  Commercial  enterprises  established  within  the  Community 
will  be  subject  to  them  and  their  differences  might  lead  to  Internal  Market  barriers  that  will 
hamper the development  of these European based commercial  enterprises when compared with 
their  international  competitors.  On  the  other  hand  the  dynamics  of  internationalisation  may 
force  revision  of  these  national  rules  particularly  when  suppliers  are  situated  outside  the 
European  Union.  This  is  also  the  case  for  equal  access  by  enterprises  to  communication 
networks. 

36- Here it is essential to allow firms  of all sizes access to communications and sales networks, 
by  ensuring  that  the  principle  of  the  freedom  of  establishment  and  competition  policy  are 
effectively  applied. Cross border commerce will require both retailers and wholesalers to  adjust 
to  competition  from  non  traditional  sources.  The  Internal  Market  principle  of  the  free 
circulation  of  services  could  give  rise  to  conflict  between  local  enterprises  subject  to  local 
regulations  and  non-domestic  suppliers  subject  to  less  restrictive  regulations  in  their  home 
countries.  Clearly  the  possibility  that  Internal  Market  barriers  will  appear  to  prevent  such 
conflicts  is  significant  and  therefore  such  regulatory  differences  need  to  be  thoroughly 
examined  and  will  form  an  aspect  of  the  consultation  arising  from  the  Green  Paper.  In 
particular,  the reasons why  commerce remains relatively  under-europeanised  should be  further 
examined  and solutions  should  be sought to enable the Internal  Market  to work for  the  benefit 
of  the  consumer,  notably  as  far  as price  variations  are  concerned. 

Ill-  THE ROLE OF AND ACTION UNDERTAKEN BY THE MEMBER STATES AND 
THE  EU  RELATING  TO  COMMERCE 

37- The flexibility  and  competitiveness of commerce  can not be maintained  if the sector is too 
firmly  constrained  by  regulation.  It  works best  on  local  knowledge  of  markets  and  individual 
initiative not on centralised regulation. Nevertheless, as with other economic sectors, the global 
market  place  sometimes  requires  a  global  response  and  global  standards just  as  the  internal 
market  offers  special  challenges  for  EU  enterprises  which  require  to  be  dealt  with  at  the 
European  level. 

1- Actions  undertaken  by  the  Member  States 

38-  Commerce  within  the  EU  is  characterised  by  disparate  national  economic,  demographic, 
legal, fiscal,  structural and cultural characteristics of each Member State.  The market, although 
part  of  a  larger  entity,  is,  above  all,  local.  Commerce  is  very  flexible  in  adapting  to  socio 
economic  structures  and 
the  differences  between  commercial  structures  in  the  EU  reinforce 
varying  consumption  and  behaviour  patterns. 

39-  The  Single  Market  provides  new  opportunities  for  traders  to  enter  new  markets  with 
products universally  in demand and to introduce new products from  regional markets into other 
localities  of  the  Union.  What  is  important  is that  the  opportunities  for  entering  local  markets 
are  not  inhibited  by  regulations  which  unfairly  restrict  competition  and  that  the  retail  trade  is 

not discouraged  from  sourcing from  non-traditional  suppliers or subjected  to restrictive  trading 
conditions  by  dominant  local  enterprises. 

40-The  regulation  of  commercial  activities  is  a competence  of  the  Member  States,  subject  to 
the respect of  Community  law as set out in the Treaties, in particular  as concerns  competition, 
freedom  of  establishment,  free  movement  of  goods  and  services. 

41-  There are differing  national rules relating to the creation of enterprises (such as registration 
and various fiscal  and social obligations), the siting and rental of commercial premises, opening 
hours,  consumer  protection  (such  as  lotteries,  discounts,  special  reductions  and  sales,  as  well 
as the  involvement  of  consumers  in product  distribution,  such  as pyramid  sales, home  parties 
and  sponsorship  gift)  and  unfair  practices  (such  as  refusal  to  sell,  conditions  of  sale  and 
purchase,  imposed,  recommended  or  maximum  prices).  Some  of  the  practices,  e.g.  opening 
hours  are  deemed  by  the  Court  of Justice to be the competence  of  the  Member  States; some, 
e.g.  consumer protection,  are subject to EU directives  as well as national  regulations. Annex  B 
provides  more  information  on the  differences  in national  regulations. 

2-  Role  and  actions  of  the  EU 

42-  Aware  of  the  importance  the  creation  of  the  internal  market  has  for  distribution,  the 
Council of Ministers  of  14 November  1989 adopted  a Resolution8  inviting  the Commission to 
present concrete proposals. On  11 March  1991 the Commission then adopted a Communication 
entitled  "Towards  a Single  Market  in Distribution"  , supported  by the  Council  of  Ministers  in 
its  Conclusions  of  30  June  199210,  which  underlines  the  fact  that  the  success  of  the  internal 
market  is dependent  upon  the  creation  of  a  single  market  in  distribution. 

43-  Many  EU legislative measures have an impact upon commerce  .  It is also vital to  ensure 
that  conditions  for  fair  competition  between  economic  actors  exist,  whilst  guaranteeing  the 
same market  opportunities.  The  Commission will  continue  to  examine  how  to  allow  different 
forms  of  co-operation,  and  in  particular  groups  of  traders,  free  access  to  the  forms  of 
organisation  and  operation  which  appear  best  suited  for  the  market  situation.  How  these 
developments  should  best be  reconciled  with  the need  to  respect the  principals  of  open  access 
and  non-discrimination  at  the  heart  of  competition  policy  is  being  examined  by  Commission 
services  at  present. 

2.1-  Actions  in  support  of  commerce 

44-  The  Commission  encourages  the  modernisation  of  commercial  enterprises  through 
COMMERCE  2000  pilot  action.  These  actions,  supported  directly  by  the  Commission,  seek 
to  promote  commercial  co-operation  through  the  use  of  new  technology,  give  prominence  to 
good  practices  and  provide  help  in  choosing  the  right  technology,  taking  account  of  each 
situation.  The  results  already  obtained  have  shown  the  impact  of  new  technologies  on  the 

8 

9 

Council  Resolution  on  commerce  in  the  context  of  the  internal  market  (89/C  297/02) 

Commission  Communication  "Towards a Single Market in Distribution" COM (91) 41 final of  11.03.91 

10  Council  Conclusions  of  30.06.1992,  Bull.  CE  6-1992,  point  1.3.58 

11 

See  Annex  C  -  Detailed  list  of community  legislatives  measures 

9 

process of commercial  co-operation,  and the importance of training to accompany  the changes. 

45-  Commercial  enterprises  also benefit  from  general  measures taken  in  favour  of  enterprises 
within  the  framework  of  the  Multi-annual  Programme  for  Community  actions  to  reinforce 
priority  areas  and  to  ensure  the  continuity  and  consolidation  of  enterprise  policy,  especially 
SMEs  given  their  importance  for  creating  employment  and  stimulating  growth.12  Given  that 
one  in  three  SMEs  is  involved  in  commerce,  actions  taken  in  favour  of  SMEs  will  normally 
include  actions  in  favour  of  enterprises  in the  commerce  sector. 

46-  Specific  actions  aimed  at  improving  information  increasing  transparency  and  raising  the 
awareness of the professionals active in commerce have been carried out. The Commission also 
uses the  Euro-Info-Centres  (EIC) network  to distribute targeted  information  about  businesses. 

47-  In addition  to  support  from  specific  enterprise policy  initiatives  other  Community  policies 
directly  assist  the  commerce  sector  in  particular  via  structural  policies  and  training  support. 
These  and  other  relevant  Community  actions  are  explained  more  fully  in  Annex  D. 

2.2-  The  consultative  framework 

48-  Given  the  importance  of  legislation  in  the  area  of  commerce  it  is  essential  that  the 
Commission consults  closely  with the parties  concerned.  In response to the  Council's  request 
in its Resolution of  14 November  1989 to reinforce  "co-operation between the Commission and 
the  Member  States  by  high  level  meetings  of  those  responsible  for  internal  commerce",  the 
Commission  set  up  and  meets  regularly  with  a  panel  of  governmental  experts  on  internal 
commerce, as well as with the Directors General of internal commerce from  the  administrations 
of  the  different  Member  States.  The  meetings  help  to  promote  exchanges  of  information 
between  the  Member  States  and  the  Commission. 

49-  It  is  equally  necessary  to  ensure  that  commerce  is  consulted  as  far  up  the  distribution 
chain as possible and, accordingly, the Commission regularly consults and informs  professional 
associations  representing  commercial  enterprises  at  European  level.  Commerce  is  thus 
represented  in  a  certain  number  of  specific  consultative  committees,  e.g.  the  Consultative 
Committee  for  Food  Products. 

50- Above all, the Commission consults the Committee on Commerce and Distribution (CCD), 
composed  of  entrepreneurs  from  commerce,  on  all  Community  legislation  or  questions 
concerning  commerce.  The  CCD  has  working  groups  on  the  internal  market,  external  trade, 
economic and financial  questions, the environment, consumer affairs, tourism and leisure, social 
affairs,  lifelong  learning and the information  society.  There are also several sub-groups dealing 
with  issues  of  specific  interest  to  commerce  ,  such  as  company  law,  distance  selling, 
competition  and  SMEs.  The  CCD  helps  the  Commission  to  identify  the  impact  of  its  draft 
legislation  on  commerce  and  therefore  the  best  means  of  achieving  its  objectives. 

51 - The Commission intends to promote a dialogue between consumers and traders and to  give 
it  a  strong  impetus.  This  objective  will  be  pursued  within  an  operational  framework,  with  a 
view  to  encouraging  both  parties  to  reflect  on  how  to  improve  cooperation. 

Decision  93/379/EEC  of  14.06.1993,  Oi  L  161  of  02.07.1993  and  Council  Decision  on  a  third 
Multiannual  Programme  for  SMEs  (1997-2000) 

10 

52- Sector-based social dialogue on commerce has taken place between the European  federation 
representing  wholesaling  and  retailing  (EuroCommerce)  and  the  European  trade  union 
representing those employed in the area (Eurofiet).  These two organisations have been pursuing 
social  dialogue  since  1983.  In  1993,  EuroCommerce  and  Eurofiet  recognised  each  other  as 
social partners within  the meaning  of Articles  3 and 4 of the Agreement  on social policy.  This 
social  dialogue led to the signature  in  1988 of a memorandum  on training  in retailing.  Various 
projects  have been  pursued  by  the  social  partners  and  supported  by  Community  grants  on  the 
basis  of  a  transnational  partnership:  for  example,  a  project  under  the  FORCE  programme 
concerning  the  long-distance  training  of  employers  and  employees  in  commerce  and  another 
project  called ASSIST relating to the training of business leaders of SMEs and new employees. 
On September  18 1996 the Commission adopted a communication  concerning the  development 
of  the  social  dialogue  at  community  level13. 

IV-  NEW  CHALLENGES  FACING  COMMERCE 

53-  On the  eve of the 21st century,  commerce  is confronted  with  a broad  range  of  challenges. 
How  commerce  reacts  and  adapts  to  them  will  impact  not  only  on  commerce  itself  but  also 
have repercussions throughout the economy and society of the European Union. The importance 
of  commerce  as  a  source  of jobs  will  need  to  be  kept constantly  under  review  as  new  forms 
of trading  are  introduced.  The  evolution  of  the  information  society,  while  providing  the  tools 
for  a more  efficient  management  of  the  logistics  and  planning  of  the  sector  also  provides  the 
means for  direct and distance selling into the home. While these trends are not likely to  replace 
traditional  trading  methods  completely  they  will  have  a  direct  impact  on  the  kind  of 
employment available  in  the  sector,  the  training  requirements  and  the  competitiveness. 

1- Ensuring  the  effectiveness  of  the  Single  Market 

54-  The  Single  Market  will  stimulate  commerce  and  Economic  Monetary  Union  (EMU)  will 
further  facilitate  cross  border  trade.  The  impact  on  local  enterprises  and  communities  of  this 
development  will need to be observed to ensure that consumers as well as entrepreneurs  derive 
a  benefit.  The  expected  benefits  include  a  wider  variety  of  products  from  a  bigger  range  of 
sources at more  competitive  prices. The  need to maintain  a viable  commerce  sector  will  bring 
pressures to  improve  competivity  which  in  turn may  precipitate  further  changes  in the  social, 
physical  and  technical  infrastructures  of  commerce. 

LI-  Barriers  to  the  Single  Market 

55-  From  the  existing  evidence  it  is  already  apparent  that  differing 
laws  affecting  the 
establishment  of  retail  operations  can  severely  hamper  existing  retail  groups  from  expanding 
their  operations  across  Europe  since  the  differing  regulations  may  imply  that  they  have  to 
totally  alter  the  shop  formats  which  they  have  successfully  developed  in  their  national  home 
markets.  These  regulations  extend  from  planning  regulations  to  regulations  on  unfair 
competition,  franchising,  solvency,  pricing  etc.  They  can  be  general  or  sector  specific  (e.g. 
pharmacies).  Such  differences  can  undermine  the  viability  of  investment  seeking  to  establish 
new  retail  operations  in neighbouring  European  markets.  This  issue requires  urgent  attention. 

56-  Similarly, the application  of differing  national  laws on the cross-border  use of  promotions 

COM  (96)  448 final  of  18.09.96 

11 

(affecting  the  cross-border  use  of  relatively  new  concepts  such  as  customer  loyalty  cards  as 
well as more traditional  sales promotions)  and on cross-border commercial  communications  in 
general  can  restrict  the  possibility  for  commerce  to  expand  and  benefit  from  the  area  without 
frontiers.  This affects  direct  marketing  and  mail  order operators  who  have to  alter the  content 
(not just  language)  of  their  marketing  material  when  operating  across  borders.  It  also  affects 
business  to  business  commercial  enterprises  who  rely  heavily  on  direct  marketing  and 
catalogues. Finally, it can also restrict those retailers near to borders who wish to advertise their 
services  to  neighbouring  non-domestic  regions.  The  Commission  is currently  considering  the 
fragmented  regulatory regime in the Internal Market that currently hampers cost effective  cross-
border commercial communication  services. It published  a Green Paper on this issue in May.14 

1.2-  Consumers'  concerns 

57-  The europeanisation  of consumer  attitudes has also affected  the development  of the  sector 
in the Single Market.Consumers are showing a change in their behaviour, thus establishing new 
challenges to which the commerce sector must adapt, in the same way as that of the production 
sector.  Increasingly,  consumers  are  concerned  by  production  methods,  together  with 
preoccupations  about  the  environment,  conditions  surrounding  production  in  certain  less 
developed  countries,  or  the  welfare  of  animals. 

58-  A  point  of  particular  concern  is  food  consumption;  the  concern  about  BSE,  chemical 
residues, genetic modifications, irradiation of food, all contribute to a general unease about  food 
quality  and  relevant  controls  and  responsibilities.  Also,  the  development  of  Community 
legislation concerning  labelling  has led to a surfeit  of information  on labels.  There are many 
consumers  who  are  unable  to  understand  or  to  use  these  details;  on  the  other  hand,  some 
information  which the consumers would  appreciate,  such as those concerning  safety  in the  use 
of  the  product,  or  its  nutritional  value,  are  lacking.Labels  must  provide  a  clear  message  to 
consumers, such as in the case of the European eco-label. An alternative to excessive  labelling 
is for  shops to  give greater  information  on their policies as regards consumer  concerns  such as 
the  environment,  e.g.  by  identifying  "green"  products  or  encouraging  recycling. 

59-  From  a  consumer  perspective,  growing  international  sourcing  expands  the  variety  of 
products  that  are  available  in  local  shops.  EU-wide  sourcing  and  more  efficient  distribuiton 
methods  also  make  those  products  available  at  lower  prices.  Any  trend  towards  price 
convergence will mean that fewer  consumers will pay the kind of unreasonably  high prices that 
are  typical  for  an  environment  with  segmented  markets. 

60-  Consumers  and  traders  do  not  always  share  a  common  interest  but  the  pursuit  of  their 
differing  objectives  should  not  give  rise  to  confrontation.  It  pays  both  sides  to  maintain  a 
dialogue to ensure that  any major  differences  can be resolved. Both the Consumer Council  and 
the Committee on Commerce and Distribution have expressed a wish to have joint  consultations 
on  some  issues. The  Commission  will  take  steps to  organize  such  consultation. 

14 

15 

"Commercial  Communications 

in  the  Internal  Market"  COM(96)  192  final. 

See  Annex  C  -  Detailed 

list  of  community 

legislative  measures 

12 

A  number  of  issues should  be  addressed  to  ensure the  benefits  of  the  Internal  Market  are 
fully  shared  bv  the  commerce  sector:  e.g. 

•  What  can  be  done  to  encourage  or  facilitate  greater  access  for  wholesalers  and 
retailers  across  frontiers? 
• W h at  kind  of  cooperation  will  permit  smaller  commercial  operators  to  ensure 
their  competitiveness  in the  Single  Market? 

1.3-  The  introduction  of  the  Euro 

61-  The  dynamic  effect  of the  Single  Market  will  be  greatly  enhanced  by  the  introduction  of 
the single currency  which will ease the burdens of instability of fluctuating  exchange rates and 
the  associated  administrative  costs  especially  on  traders  involved  directly  in  cross-border 
trading.  The  Madrid  Council  of  December  1995  endorsed  a  three-phase  scenario  for  the 
introduction  of  the  single  currency.  EMU  will  be  launched  on  1  January  1999,  when  the 
exchange  rates  will  be  locked  and  the  euro  will  become  the  single  currency  of  the  monetary 
union.  Euro  notes  and  coins  will  enter  circulation  by  the  end  of  2001  at  the  latest. 

62- The introduction of the single currency is of great importance to the distribution chain since 
it will  be  one of the  most affected  areas in the economy.  The role  of traders  will  be  essential 
for  it is they  who  will  be asked to  "sell" the euro to consumers to familiarize  citizens  with  the 
euro. For many  EU  citizens, their  first  practical  experience  of the euro  will  be  when they  are 
shopping. 

63-  Preparations  for  the  EMU  are  gathering  pace.  The  Commission  on  16  October  1996 
adopted  draft  regulation  on  the  introduction  of  the  euro  with  a  view  to  giving  economic 
operators  legal  security.  Inter alia,  the proposed  legislation defines  the  legal  status of  the  euro 
and  ensures  full  legal  equivalence  between  the  euro  and  national  currency  units  during  the 
transitional  period.  Moreover,  it  reaffirms  the  principle  of  the  continuity  of  contracts  and 
specifies  a general rounding  rule. It is hoped that agreement  on these proposals can  be  reached 
at  the  forthcoming  Dublin  European  Council  meeting  in  December  1996. 

64- Retailers will have to convert prices from national currency to the euro. Establishing a price 
list  in  euros  is  not just  a  matter  of  multiplying  through  the  fixed  conversion  rate.  Prices  will 
be  set  at  convenient  levels  which  are  effective  from  a  marketing  standpoint  and,  inevitably, 
some  prices  may  need  to  be  adjusted  in real  terms.  Shops  will  need  to  assist their  customers 
to  cope  with  a new  and  unfamiliar  price  structure  in euros. Particular  attention  must  be  given 
to those citizens who will face  most difficulties  in making conversions, such as the elderly  and 
visually  impaired.  One possibility  to  familiarise  customers  would  be  to  display  prices  in  dual 
form.  Other  possibilities  would  be  displaying  conversion  tables,  distributing  information 
leaflets  or  placing  simple  calculators  at  the  disposal  of  clients.  The  Commission  will  shortly 
propose  appropriate  measures  in this  specific  field. 

65- There will be a new demand for the training of personnel and staff dealing with the  general 
public.  They  will  also  need  to  be  trained  to  deal  with  the  change  in accounts  and  use  of  new 
equipment, particularly  during the transitional period. The arrangements  for the introduction  of 
euro  notes  and  coins  and  the  withdrawal  of  national  notes  and  coins  from  circulation  will 

COM(96)  499  of  16.10.1996 

13 

present  logistical  challenges.  This  phase  will  last  a  maximum  of  six  months  and  must  be 
completed  by  1 July 2002. Cash handling  devices such as vending  machines and cash  registers 
will  need  to  be  adjusted  to  the  technical  specifications  of  euro  notes  and  coins. 

66-  EMU  will  lead  to  greater  price  transparency  between  countries  as  consumers  can  more 
easily  compare prices  in euro. This could  result  in increased cross-border  shopping,  especially 
if  there  are  high  price  differentials  between  Member  States.  It  could  present  an  immediate 
advantage  to  commerce  and  specially  to  distance  sellers  and  encourage  a  more  rapid 
development  of  electronic  commerce. 

67-  The  commerce  sector needs to prepare  for  the  potential  opportunities  which  the  improved 
functioning  of  the  internal  market  entails.  Information  and  assistance to  customers  should  be 
seen  as  an  important  marketing  tool  to  attract  a greater  market  share. 

68- Public  authorities have a key role to play in assisting private  economic  agents to  introduce 
the  euro,  in  particular  via  the  provision  of  precise  timely  information.  For  its  part,  the 
Commission  working  together  with  the  European  Parliament  has  launched  an  information 
campaign  on  EMU.  The  involvement  of  all  groups  of  currency  users,  such  as  business 
associations,  is  critical  to  the  success  of  the  programme.  Given  their  central  role  in  assisting 
citizens  make  the  change  to  the  euro,  associations representing  commerce  must  be  associated 
with  this  initiative.  The  Commission  is examining  how  best  to  achieve  this  objective. 

National  authorities  and  the  Commission  are  under  an  obligation  themselves  to  reflect 
how  the  ongoing  communication  campaign  can  address  the  information  needs  of  this 
sector  and  how  they  can  facilitate  the  necessary  adjustment  process. 

In  particular  they  may  wish  to  address  the  issues  of  whether  there  is  a  special  role  for 
Member  States,  the  banks,  the  large  store  groups,  the  professional  organisations,  other 
specific  groups  and  which  of  the  sector's  adjustment  problems  are  specific  to  the  sector. 

2-  Enterprise  environment 

2.1-  Administrative  burdens  and  simplification  of  legislation 

69- As has been  mentioned  , since one  in three  SMEs  is involved  in commerce  actions  taken 
in  favour  of  SMEs  will  benefit  the  commerce  sector  directly.  The  Commission  has  recently 
issued  a  number  of  communications  and  recommendations  in this  area  which  have  no  legally 
binding  effect  but  act  as signals and  indications to encourage  Member  States to be  inspired  by 
each  others'  best  practices.  The  Commission  has  hitherto  intervened  on  the  themes  of 
improvement  of  the  tax  laws  and  the  transfer  of  SMEs,  payment  deadlines  in  commercial 
transactions  and  the  definition  of  SMEs. 

70-  One  of  the  most  important  issues  is  administrative  and  legislative  simplification  and 
deregulation.  Parallel  to the report of the Molitor  Group, and in the context  of the White  Paper 
on  "Competitiveness,  Employment  and  Growth",  the  Commission's  strategic  programme  for 
the  completion  of  the  Single  Market  and  the  Integrated  Program  for  SMEs,  a  Committee  on 
the simplification  of the business environment  has also been  established, with the objective  of 

Supra  II-  2.1-  actions  in support  of  commerce 

14 

exchanging  best practices,  and  focusing  on  the  possibilities  of  easing  the  burden  on  business, 
especially  small  and  medium  sized  enterprises  (SMEs), through  legislative  and  administrative 
simplification. 

71- The Commission has also recently adopted a communication containing a report on the first 
actions  in  the  SLIM  initiative  aimed  at  simplified  Community  and  national  legislation.The 
reduction  of  administrative  burdens  associated  with  over-regulation  and,  hence,  the  reduction 
of  costs  should  be  of  immediate  benefit  to  the  consumers.  The  complexity  of  national 
legislation  surrounding  the  sector  and  its  potential  constraint  on  a  rapid  achievement  of  the 
objectives  of  the  Single  Market  together  with  specific  leg'slation  on  labelling  merit  special 
attention. The Commission will consider which aspects of legislation affecting  this sector would 
benefit  from  future  SLIM  initiatives. 

2.2-  Training 

72-  The  evolution  in  organisation,  infrastructure,  know-how  and  methodologies  of  the  sector 
is  creating  a  demand  for  new  or  more  refined  skills.  This  means  that  commerce  must  be 
prepared  to  invest  in training  of  personnel  from  the  shop floor  to  senior  managers  in  order  to 
take advantage of the new opportunities especially those associated with the introduction  of the 
euro  and  the  new  information  technologies.  The  Commission  already  offers  support  for  such 
training within the framework  of the Leonardo da Vinci Community programme  , which  gives 
significant  support to a certain number  of transnational  pilot-projects  in this domain.This  must 
be  reinforced,  principally  as  far  as  SMEs  are  concerned. 

73-  In addition  to the need  to train  employees  in the new techniques and the new  environment 
which  is  emerging  from  the  innovations  by  traditional  means,  firms  can  engage  in  distance 
training  by  means  of  computer  networks  which  can  be  used  for  teaching  and  motivating 
entrepreneurs  and  their  staff  on  business  related  subjects.  Distance  training  is  extremely 
flexible  because  it enables  training to be carried  out without people having  to leave their  place 
of  work. 

2 3-  Statistical  information 

74-  Without  reliable  information,  economic  operators  can  only  take  decisions  on  the  basis  of 
hypotheses or estimates, a process which itself leads to inequalities between operators as SMEs 
lack the means  to  conduct  large  scale research.  It  is therefore  important  for  those  involved  in 
commerce,  be they  economic  operators  or public  authorities, to have at their  disposal  statistics 
and  economic  analyses  in  order  to  facilitate  taking  the  necessary  decisions  and  to  respond 
promptly  to  the  need  to  adapt. 

75-  Accordingly,  to  improve  statistical  information  an annex  on  "commerce" was  integrated 
into  the  proposed  rules  on  structural  statistics  on  business  presented  by  the  Commission  on 
3  April  199520,  and  which  is  now  awaiting  adoption  by  the  Council.  Professionals  have 
supported  this  initiative  within  the  CCD:  if  business  charges  are  to  be  reduced  as  much  as 
possible, some reliable  and  detailed  statistics are  indispensable to the economic  players.  Some 

18 

See  Annex  D  -  "training  support" 

19  See  Annex  D -  "statistics" 

20  OJ  C-146  of  13.6.95 

15 

statistical  studies  have  been  prepared  and  published  by  Eurostat  in  collaboration  with 
DG  XXIII"  .  Methodological  manuals  have  been  drawn  up  and  are  available  to  national 
statisticians  in order  to have accurate  and comparable  statistics in the different  countries of  the 
European  Union. 

76-  We must nevertheless examine  in the context  of this Paper whether more needs to be done 
to  enable  decision  makers both private and  in public administrations  to have a clear  up to date 
picture  of  the  current  situation  and  the  trends.  The  sector  itself  should  consider  setting"up  a 
system  (i.e.  database)  to  help  increase  commercial  awareness  on  the  possibilities  within  the 
Union  to  meet  demand  on  new  products.  Any  such  action  would  need  to  take  into  account 
the  additional  administrative  burden  which  may  be  placed  on  enterprises  as  a  result  of 
providing  additional  statistics. Without such information  the increasing globalisation of supply 
and  point-of-sale  marketing  could  leave  EU  entrepreneurs  at  a  disadvantage. 

The  commerce  sector  will  benefit  from  the  energetic  application  of  the  Commission 
enterprise  policy  and  should  immediately  tackle  with  the  Commission  the  problems  of 
overregulation,  notably  in  labelling,  and  the  needs  for  properly  structured  training  for 
both  traditional  and  new  skills.  It  must  also  examine  how  the  information  flow  can  be 
improved  so  that  i)  decision  makers  in  the  smaller  enterprises  are  constantly  up-to-date 
with  the  market,  and  ii) public  administrations  have the data  to understand  and  to  address 
the  problems  of  the  sector. 

3-  Employment,  competitiveness  and  cohesion 

3.1-  The  rural  environment 

77-  Our  society  depends on trade  without  which  it would  loose its dynamism and  its cohesion. 
This  feature  is very  apparent  in rural  areas which  cover  80% of Community  territory  and  they-
are  very  diverse  in  character.  Many  rural  communities  today  face  a  shortage  of  commercial 
enterprises  or  primary  services,  notably  in  sparsely  populated  areas  with  a  loose  urban 
framework.  This phenomenon  is not new but  it has worsened  in the last  15 years with changes 
in  lifestyles,  patterns  of  consumption  and  the  distribution  chain  itself. 

78-  The  decline  of  the neighbourhood  shop  is a symptom of the trend  of economic  flight  from 
rural  areas  (exodus  of  the  local  community,  serious reduction  in primary  activities,  especially 
employment  in  agriculture,)  and  is a cause  for  serious  concern.  When  the  last  shop closes  the 
future  of  the  village  itself  is threatened  because  commerce  is a  facility  unlike  others. 

79- Local  commerce  is an efficient  way  of trying  to reduce the risk of marginalisation of  rural 
populations  who  must be  able to  benefit  from  a wide  range of  locally-provided  services.  It  is 
sometimes  vital  to  retaining  other  activities  such  as  providing  the  natural  outlet  for  local 
craftsmen,  especially  in  tourist  areas  where  trade  is  highly  seasonal.  Commerce  performs  a 
variety  of  roles:  the  function  of  livening  up the  local  community  and  creating  social  bonds  is 
largely  fulfilled  by  local  shops.  They  are  an  attraction  for  the  local  inhabitants  and  the 
surrounding  area  and  often  become  the  only  meeting  place.  Commerce  performs  an 
irreplaceable  social  function. 

"Retailing  in the  European  single  market  1993" and  "Retailing  in the  European  economic  area",  1993 
and  1995, EUROSTAT  and  DG  XXIII 

16 

80-  Local  rural  shops are  usually  characterised  by  limited  sales areas, with  a reduced  selection 
of  goods  on offer,  mostly  food  items.  They  are  also  restricted  to  customers  who  live  nearby. 
Yet  commercial  SMEs  must be  able to  offer  competitive  prices, allowing  the  local  population 
to  defend  their  spending  power  and  to  raise  their  standard  of  living,  especially  for  elderly 
people. 

81-  Ensuring  the  delivery  of  products  to  less-populated  areas  is  one  of  the  most  important 
problems facing  them.  In fact, a price gap between rural  shops and the closest medium to  large 
sized  stores  may  well  be  inevitable.Studies  examining  the  establishment  of  this  type  of  shop 
conclude  that  the  price  gap  need  not  exceed  15-20%.  Commerce  must  examine  the  logistical 
structure  (franchise,  voluntary  chain,  purchasing  group,  electronic  ordering)  as  a  means  of 
achieving  the  necessary  competitiveness. 

82-  Modern  sales  outlets  in  rural  areas  can  become  multiservice  businesses  through  being  a 
medium  for  postal  or  banking  operations,  the  orders  and  delivery  department  for  distance 
selling groups or the contact point for telecommunications  networks. The creation of such mini-
service  centres  in  sparsely populated  areas  can  play  a part  in the  development  of networks  for 
the  provision  of  services to the elderly.  Pilot  projects  undertaken  in this area,  e.g.  in  Germany 
(Nachbarschaftsladen  2000),  France  (1000  villages)  and  the  United  Kingdom  have  shown 
interest  in  this  approach. 

83-  The  structure  of  sales patterns  in rural and  less populated  areas can prompt  suppliers to  set 
themselves up in proximity,  along with all the related  services they use. Thus, the  maintenance 
of  commercially  viable  shops  in  rural  areas  has  local  effects  on  employment  and  economic 
activity.  This  is  accentuated  in  sparsely  populated  areas,  such  as  islands  or  peripheral  zones. 
Local  shops  are  part  of  the  17  areas  identified  by  the  Commission  in  its  research  on  Local 
Development  and  Employment  Initiatives  (LDEI)  and  taken  up  again  in  the  Commission 
Communication  on  "A European  strategy  encouraging  LDEIs". 

3.2-  The  urban  environment 

84-  On  the  threshold  of  the  21st  century,  European  cities  are  still  the  main  economic, 
innovative and  cultural  centres:  80% of the  EU population  lives  in urban  zones.  In the  era  of 
mass consumption,  new forms  of distribution  have changed  urban land use with the  appearance 
of  large  out-of-town  shopping  centres,  as well  as the  widespread  establishment  of  specialised 
shops along arterial  routes  sparking off  or contributing  to the economic  decline of city  centres. 
Inner  city, planning  and  the  commercial  equilibrium  in  urban  areas  are  a major  political  issue 
in  many  countries. 

85-  The  development  of  city  centres  as  locations  for  the  service  industries  (offices,  financial 
services, cinemas, theatres, public  administration,)  and  the consequent  rise in the cost of  space 
has,  in the recent  past,  put pressure on city  centres  residence  and choice  of jobs.  A paradox  of 
high  rents, high  prices  and  high unemployment  being  organically  linked  in city  centres  has  its 
effects  on  commerce. 

86-  Some  areas  face  difficulties  of  supply.  These  areas  normally  have  other  social  problems 
not  directly  related  to  commerce  other  than  a  low  effective  demand.  In  some  cases  the  hard 
discount  or  the  supermarket  is the  only  local  shop. Nevertheless  their  requirements  for  access 
to  supplies  must  be  met.  In  the  absence  or  reluctance  of  external  investors  the  endogenous 
development  of  neighbourhood  shops  in these  urban  areas seems  to be,  by  its very  nature,  the 
rational  response.  It  would  create  employment  and  also  the  feeling  of  safety,  as  shops  are 

17 

meeting  places  and  centres  of  exchange  that  further  the  revitalisation  of  local  communities. 
There  is  scope  for  examining  the  possibility  of  extrapolating  the  experience  of  the  large 
retailers  who  have  developped  local  co-operation  in city  centres  and  commercial  areas. 

87-  An  integrated  policy  in  favour  of  the  city  seems  increasingly  necessary.  It  is  a  question 
of  achieving  a balance  that  takes  into  account  the  interests and  needs  of  all  inhabitants  living 
in  urban  areas  and  indeed  of  society  as  a  whole  as well  as ensuring  that  access  to  the  market 
place  is  kept  open  and  that  active  competition  is  maintained. 

88-  Commercial  development  in suburbs, in most cases supermarkets, is already  an  established 
phenomenon  in the  northern  Member  States and  in full  expansion  in southern  Member  States. 
It  is  important  not  only  to  examine  the  competition  between  small  traders  in city  centres  and 
suburban  supermarkets  but  also  that  between  big  suburban  shopping  centres  and  large  city 
centre  shops, non-food  specialised  supermarkets,  small traders, etc. and to  look  at  competition 
between  commercial  poles  rather  than  between  forms  of  commerce. 

89-  The  impact  on  the  environment  of  passenger journeys  undertaken  by  consumers  -  usually 
in a car  - on their  way to and from  shopping centres on the urban periphery  or green field sites 
has an  impact  on  sustainable long term development  of cities. Equally,  growing  congestion,  in 
particular  in city  centres, has repercussions  for  commerce,  such as difficulty  of  deliveries  and 
rising  logistical  costs.  The  environmental  impact  of  the  changing  infrastructure  of  commerce 
should  be  tackled  by  the  different  interests  working  together  and  the  Commission  can  give  a 
lead  by  stimulating  the  debate. 

A  number  of  questions  should  be  asked  about  enhancing  competitiveness  and  ensuring 
stability  and  social  cohesion  during  the  structural  adjustments  affecting  commerce: 

• H ow  can  the  continuing  operation  of  local  small  scale  commerce  despite  short 
term  economic  and  market  trends  be  ensured? 
•  How  can  the  conflicting  interests  between  environmental  objectives,  the 
increasing  use  of  the  private  car  as  a  shopping  vehicle  and  the  needs  of  non-
mobile  sections  of  the  population  be  reconciled? 
•  How  can  the  traditional  synergy  between  commerce  and  the  community  as 
regards  employment  and  service  be  maintained? 

4-  The  Information  Society  and  Commerce 

90-  The  use of  information  technologies  makes  it possible to enhance  existing  services and  to 
create new multi-media services and applications which combine sound, text and visual images. 
The  development  of these modes  of communication  provides  an opportunity  for  strenghtening 
the competitiveness of enterprises and opening new perspectives regarding organisation of work 
and  job  creation.  The  application  of  new  technologies  to  everyday  life  is  transforming  our 
world  into an Information  Society.  The Commission has recently  published  several  documents 
on  this  theme". 

Green  Paper  "Living  and  working  in  the  Information  Society",  COM(96)  389  final  of  24.07.96, and 
Commission  Communications  "The  Information  Society:  from  Corfu  to  Dublin  - The  new  emerging 
priorities" and  "The implications of the  Information  Society  for European  Union  Policy - Preparing  the 
next  steps", COM(96) 395  final  of 24.07.96. Commission  Communication  on  "Europe at the  forefront 

18 

91-  The  use  of  these  technologies  has  provided  important  opportunities  for  new  commercial 
activities  which  range  from  advertising  on  the  Internet  to  conducting  trade  transactions 
electronically.  Commercial  enterprises have to re-examine their  strategy  and  organisation,  an 
activity which will have implications as regards training of heads of enterprises and  employees 
with an eye to preparing and motivating them for the constant changes which will be necessary. 
The  entire distribution  chain  from  the  producer  to the  consumer  will  have to  reorganise  itself 
and adapt its structures and strategies accordingly.  Relationships with consumers will  similarly 
be  transformed. 
It  is  essential  to  increase  awareness  among  our  citizens,  consumers  and 
entrepreneurs  and  to  analyze  not  only  the  positive  effects  and  new  opportunities  offered  to 
commerce  and  to  consumers,  but  to  examine  the  risks  and  negative  side-effects  which  the 
Information  Society  could  engender. 

92-  Apart  from  direct  sales  to  final  consumers,  enterprises  are  also  interested  in  examining 
business to business opportunities. These may  include catalogues or company  brochures  which 
enable  commercial  enterprises  to  expand  their  range  of  potential  suppliers  and  partners, 
financial  and  solvency  information  on  competitors  or  suppliers,  as  well  as  information  on 
markets and  on regulatory  issues, especially relating to local markets.  Commercial  enterprises 
may also wish to provide information  themselves, mainly to consumers, with the aim of raising 
the  company's  profile  by  putting  on  line  information  and  commercial  communications  which 
stand  a  reasonable  chance  of  being  seen  and  the  presentation  of  products  via  electronic 
catalogues. 

93-  All  these  possibilities  are  available  on  systems with  a world  wide  application.  Electronic 
commerce increases opportunities  for participation  in the global market place. It is possible  for 
sellers to expand their geographical  range without any physical movement.  Cross-border sales, 
particularly  of  SMEs, will  accelerate  faster  through  the use of  electronic  trading  than  through 
traditional  means.  It  will  also  increase  market  opportunities  for  SMEs  in  peripheral  regions. 
Recognising this global aspect and the strategic importance to involve  SMEs as the  foundation 
of  economic  activity  and  key  to  innovation,  the  G7  Pilot  Project  "Global  Marketplace  for 
SMEs"  offers  the  opportunity  to  spread  internationally  activities  and  projects  launched  on  a 
regional  basis  and  to  allow  participation  of  European  SMEs  in the  global  trade  market. 

94-  Clearly,  the  changes  which  companies  need  to  effect  to  take  account  of  new  technologies 
will have an impact upon employment  within the distributive trades.  The exact nature of these 
repercussions  will  depend  on  the  share  of  the  market  accruing  to  "virtual"  sales.  Electronic 
commerce  looks likely to acquire an important part of the market, in which case a new division 
of  the  market  will  occur  possibly  to  the  detriment  of  traditional  forms  of  selling,  such  as  that 
in  shops,  with  a  risk  of  large  scale  redundancies,  especially  in  large  stores.  It  is,  however, 
premature  to  exclude  the  possibility  that  the  stimulus  to  participate  in  a  larger  global  market 
will  still  leave  enough  room  in  the  new  infrastructure  for  traditional  forms  of  selling  to 
maintain  their  volume  even  with  a  smaller  share.  At  the  same time,  new jobs  will  be  created 
by,  for  example,  new  operators  on  the  market  or  the  development  of  branches  specialised  in 
electronic  commerce,  and  in  packaging  and  delivery  services.  It  is  difficult,  however,  to 
estimate with any accuracy what the direct effects  will be on overall employment or on existing 
commercial  enterprises. 

of  the  global  information  society:  Rolling Action  Plan"  under  preparation. 

19 

Enabling  technologies  for  Electronic  Commerce 

Electronic  Commerce  encompasses  a  wide  range  of  communication 
technologies 
including  email,  fax,  EDI,  EFT  multi-media,  shared  databases,  electronic  catalogues  and 
directories.  Any  of  these  technologies  can  be  used  to  support  electronic  commerce,  the 
choice  will  be  governed  by  the  context  of  their  use  (each  is  highly  appropriate  for  some 
contexts  and  inaproppriate  for  others). 

EDI  (Electronic  Data  Interchange)  provides  an  application-to-application  communication 
technology  which  facilitates  the  electronic  exchange  of  orders, faster  delivery,  better  time 
management  and  improved  customer  satisfaction. 

Internet,  email  and  home  pages  offers  different  possibilities  of  connection  and  usages  and 
seek  to  reach  the  widest  potential  of  users at  low  communication  cost. 

Application  of  EDI  has  been  one  of  the  subjects  dealt  with  in  the  framework  of  the 
COMMERCE  2000  action.  Though  it  is  well  established  in  European  countries,  it  has 
been perceived  by  many  SMEs to be too complex  and too  costly  in  view  of their  business 
requirements  and  developments  of  Internet tools  may  be easier  to  acess  and may  better  fit 
their  needs. 

On  the  positive  side,  Internet  tools  allow  companies  to  strengthen  their  brand  image,  to 
expand 
long  distance 
communications.  However  the  current  disadvantages  are  a variable  quality  of  service  and 
limited  security,  especially  with  regard  to  payment. 

their  distribution  channels  and 

savings  on 

to  achieve 

95-  The  development  of  electronic  commerce,  along  with  the  creation  of  "virtual"  shopping 
centres,  could  lead  to  the  emergence  of  new  operators  in the  distribution  chain,  for  example, 
producers of physical goods for whom new technologies could simplify  distribution,  producers 
of information  (computer software, books, films etc.), electronic retailers, specialised in various 
areas, who today  use traditional  distance selling and  new specialised  companies  which  operate 
on  the  market  by  using  market  makers  (organisers  of  electronic  markets).  There  will  also  be 
new kinds of distributor using systems for the physical distribution of goods adapted to  deliver 
directly  from  the  producer  to the  consumer  or  in co-operation  with  an  electronic  trader  or  the 
market  maker.  Such  delivery  systems have already  been  developed  by enterprises  involved  in 
distance  selling  which,  in  certain  cases,  guarantee  delivery  the  day  after  an  order  has  been 
placed. 

96-  Other  new  operators  are  electronic  networks  or  telecommunications  companies,  such  as 
cable  operators,  telephone  companies  or  private  networks  which  can  provide  access  to  the 
consumer's home and  those using market choice boxes (servers designed  to facilitate  consumer 
use  of  interactive  programmes)  through  which  a  vast  choice  of  electronic  traders  can  be 
reached.  In effect,  these servers help to designate  how the telephone, television  and  computer 
will  be  combined  to  link  the  home  to  the  market  place. 

97-  Information  technologies  can  contribute  to  reduce  distribution  costs  to  a  minimum,  for 
example, the sale and distribution of computer  software  via a communication  network.  It  may 
be  possible  to  reduce  distribution  costs  along  the  entire  length  of  the  distribution  chain. 
Electronic  links  between  producers  and  retailers  make  it  possible  to  lower  costs  by  reducing 
paper  transactions  or  replacing  them  entirely  by  electronic  transactions. 

20 

ECR  (Efficient  Consumer  Response) 

ECR  involves the  setting  up of a close partnership  between  suppliers and  distributors  with 
the  installation  of  the  required  technologies,  especially  the  EDI:  "just-in-time"  deliveries 
by  planning  orders  and  automatic  replenishing  of  stocks  by  sharing  sales  data; 
management  of  sales and  promotional  areas  and  the joint  development  of  new  products. 

A  study  presented  at  the  "Congress  on  ECR  in  Europe"  on  25  and  26  January  1996 
indicated  that  ECR  represents  total  savings  of  250  MECU  within  the  EU,  equivalent  to  a 
possible reduction  of  5.7%  of the retail  price.  But ECR  implies  a total  re-examination  of 
commercial  relations  between  producers  and  distributors.  What  is  required  is  a  move 
away  from  flows  within  the  distribution  chain  pushed  by  producers  to  flows  pulled  by 
demand. 

Development  of  ECR  must  be  monitored  to  ensure  that  both  manufacturers  and 
consumers  continue  to  benefit  from  this  substantial  shift  in  economic  power  towards 
retailers.  In  particular  it  is  important  to  prevent  dependence  of  the  manufacturing 
industry,  notably  SMEs, on single outlets and consumers choice  being  dictated  by  internal 
management  decisions  geared  to  company  financial  considerations  rather  than  consumer 
need  (e.g.  lowering  quality  for  cost reasons). 

98-  In  the  framework  of  home  shopping  teleshopping  has  became  an  important  activity  of 
distance  selling.  The  legal  framework  for  trans-european  teleshopping  (Directive  89/552/EEC 
"Television without  frontiers")  is currently  under  revision.  The  draft  directive  concerning  the 
protection  of consumers  in respect of distance contracts (distance  selling)  is at the  conciliation 
stage.The  future  directives  will  contain  among  other  measures  more  specific  provisions  on 
teleshopping. Home shopping can become more attractive by offering  on-line information.  The 
development  of  "virtual  shopping  centres"  is  already  under  way.  Home  shopping  will  still 
require  the physical  delivery  of the goods to the purchaser,  who no  longer  has to  go  shopping 
to  get  what  he/she  wants. This  will  lead  to  a change  in transport  pattern  -  less  shopping  trips 
but  more  deliveries,  opening  up  potential  employment  opportunities. 

99-  The  potential  changes  in  consumer  behaviour,  mainly  to  the  degree  consumers  can  put 
confidence  in  the  new  systems,  will  depend  on  the  extent  to  which  they  are  left  safely  and 
conveniently able to exploit the facilities  offered  by new technologies in terms of price, product 
quality,  available  choice  and  time  savings. 

100-  The  problem  of  the  security  of  electronic  transactions  is  already  a  major  subject  of 
discussion,  the  importance  of  which  is  growing  daily  with  the  development  of  shopping  by 
computer.  Electronic  commerce  needs  security  for  its  operations,  especially  at  the  payment 
stage, which requires the use of a specific  encrypting system, yet it is clear that the current  lack 
of  any  regulation  in  this  area  is causing  a distortion  of  the  internal  market  and  constitutes  an 
impediment  to  its smooth operation23.  The Commission indicated  in its Communication  on  the 
Confidence  Pact  for  Employment  presented  to  the  Florence  European  Council  in  June  1996, 
that  proposals  for  regulations  in  the  field  of  electronic  commerce  are  necessary. 

Green  paper  on  the  legal  protection  of  encrypted  services  in  the  Single  Market,  COM  (96)76  of 
06.03.1996 

21 

In  addition  to  meeting  the  most  immediate  challenge  of  providing  an  appropriate 
regulatory  framework  for  the  development  of  electronic  commerce  a  number  of  other 
challenges  need  to  be  tackled,  e.g.: 

•  What  will  be  the  role  of  the  Union,  the  Member  States  and  the  trade  itself  in 
ensuring  a  secure  transparent,  integrated  and  competitive  market  in  the  new 
environment? 
• W h at  will  be  the  effect  on  employment  in  the  sector  as a whole  as  well  as 
distinct  parts  of  it? 
•  What  can  be  done  to  enhance  the  awareness  of  the  sector  to the  new 
opportunities? 

V-  OPTIONS  FOR  THE  FUTURE 

101- The analysis of commerce outlined  above, while not exhaustive, provides an overview  of 
a number of problem  areas which are of concern to many sectors but in which the future  health 
of  commerce  plays  a  pivotal  role. Although  these  problem  areas  are  extremely  complex  and 
will  be  affected  by  political  decisions  at  many  levels  involving  society  at  large,  there  will  be 
no  lasting  solutions  to  these  problems  unless  we  can  guarantee  a  healthy  development  of 
commerce. 

102-  From  areas  as  diverse  as town  planning  and  rural  development  to  transactions  payment 
security  in  an  environment  more  and  more  influenced  by  information  technology,  legislators 
can  either  assist  or  obstruct  the  initiatives  taken  by  entrepreneurs  to  establish  a  viable 
commerce.  Most of these decisions will continue to be taken at national, regional or even local 
level,  but  the  evolution  of  the  internal  market  will  increasingly  involve  decisions  at  the  EU 
level.  The  debate  on  these  issues  must  take  place  now  if  the  EU  is  to  adapt  as  painlessly  as 
possible to  the  evolution  in  progress. 

103- This  debate  will  be  in keeping  with the subsidiarity  principle,  if  it takes  into  account  the 
three  lines  of  action  at  Community  level: 

•  consultation  or  co-ordination  between  public  authorities  through  an  organised 
exchange  of  best  practices,  with  the  aim  of  identifying  benchmarks  for  successful 
solutions, 

•  co-ordination  of  Community  policies  whicn  can  have  an  impact  on  these  problem 
areas, 

•  action  at  Community  level  to  the  extent  necessary 
problems. 

to  contribute  to  solving  the 

104-  These  different  modalities  of  action  have  been  successfully  applied  in  the  field  of 
enterprise  policy  and  can  therefore  serve  as  useful  instruments  to  indicate  the  options  under 
discussion. 

105-  Responses  to  this  Green  Paper  are  invited  both  to  provide  information  and  to  suggest 
possible answers or directions to follow.  The Commission is conscious of the fact  that  so many 
daily  activities  affect  the  commercial  environment  or  are  affected  by  it  that  no  paper  could 

22 

cover  all  aspects.  It  firmly  believes  that  without  an  open  public  debate  on  the  various  issues 
identified  in  the  paper  Community  enterprises  will  be  disadvantaged  in  the  rapidly  evolving 
global  market  place  and  may  be unprepared  for  the  social  adjustments  which  are taking  place 
in the Member  States. The  Commission  believes that  by  launching  a debate  now  the  EU  will 
be  in a position  to  supply  decision-makers  at  all  levels  with  a set of  options  which  will  allow 
for the necessary  initiatives to be taken in time to meet the challenges of the next  few decades. 
In the context  of the consultations arising from  this Green Paper and  in the course of  1997 the 
Commission  will  propose  specific  measures to  deal  with  the  most  immediate  challenges. 

Accordingly, 

the  European  Parliament 
the  Council  of  Ministers 
the  Member  States 
the  Economic  and  Social  Committee 
the  Committee  of  the  Regions 
representative  organisations,  the  social  partners  and  other  bodies  active  in 
commerce  at  European  or  Member  State or  regional  level 
individuals  with  experience  or  knowledge  of  the  sectors 

are  requested  to  give  their  reactions  to this  Green  Paper  on  the  role  of  commerce  in  the 
European  Union. 

no  later  than  31  May  1997 
to 
European  Commission 
Directorate  General  XXIII 
"Green  Paper  on  Commerce  and  Distribution" 
rue  de  la  Loi 200  Wetstraat 
B-1049  Brussels 

For  additional  information: 

telephone: 
fax: 
E-Mail: 

(+  32  2)  295  16 42 
(+  32  2)  295  89  84 
commerce@dg23.cec.be 

23 

ANNEX A: STATISTICS 

Introduction 

The  purpose  of  the  tables  and  figures  in  this  annex  is  to  present  a  general  panorama  of  European 
commerce  at the  beginning  of the  1990s. They  are  based on the  most  recent  data  available, which  explains 
why  the  dates  are  not  always  uniform  within  the same table.  Originally  these  data  come  from  the  National 
Statistical  Institutes,  Eurostat  databases  (Mercure  for  statistics  on  services  and  New  Cronos  for  the 
harmonised  national  accounts)  and  sometimes  from  university  or  private  sources.  For  the  most  part  they 
are  lifted  from  recent  or  forthcoming  Eurostat  publications  (cf.  following  bibliography). 
In  general,  the 
statistics  reproduced  cover  macro-economic  values  (number  of  enterprises  and  local  units,  number  of 
persons employed, turnover,  valued  added,  etc.).  However, the last three tables  relate to the  main  retailing 
groups  (turnover,  involvement  in international  trade)  and the  main  buying syndicates  operating  at  European 
Union level. 

For further  information: 

'Retailing in the  European  single  market  1993" DG XXIII and Eurostat  1993,  Office  for Official  Publications 
of the European  Communities. 

'Retailing  in  the  European  Economic  Area" (Supplement  to  the  former  publication  dealing  with  the  EFTA 
countries),  DG XXIII  and  Eurostat  1995, Office for Official  Publications  of the  European  Communities. 

Retailing, services, transport,  Monthly  Bulletin, Eurostat. 

Forthcoming  publications: 

'Retailing  in the  European  Economic Area"  Update of the two  previous  publications,  Publication  planned for 
1997 (first  half  of year). 

"Wholesaling  in the  European  Economic Area. Publication  planned for  1997 (first  half of year). 

'Retailing  in  the  Central  and  Eastern  European  Countries  (CEECs)"  Publication  planned  for  1997  (first 
quarter). 

<y ?\ 

1.  Importance  of commerce  in the  European  Union 

Commerce  accounts  for  almost  13% of  the  total  Gross  Domestic  Product  of  the  15 countries  of  the  Union, 
employing  more  than  15%  (15.6)  of the  active  population  and encompassing  almost  30% of  enterprises.  In 
terms  of  these  three  yardsticks  countries  display  substantial  differences,  which  are  the  result  of  national 
characteristics, for example the  importance  of tourism  or the  predominance  of small  enterprises.  They  may 
also  arise  from  the  statistical  sources  and  methods  used.  For  this  reason  any. differences  should  be 
interpreted  with  caution  as  long  as  the  Commission's  policy  of  standardising  commerce  statistics  has  not 
been  implemented. 

Table  1: Share  of commerce1(1991) in the  European  economy 

Belgium 
Denmark 
Germany4 
Greece5^ 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United  Kingdom 
EU 15 
Iceland 
Norway 
EEA 
United  States6 
Japan 

% of Gross 
2 
Domestic  Product 
15.2 
12.3 
10.5 
11.2 
15.4 
12.6 
8.7 
15.5 
13.9 
12.8 
13.0 
17.1 
8.9 
12.0 
11.5 
12.7 
11.0 
12.3 
12.7 
14.5 
13,4 

% of total 
employment 
16.3 
12.1 
14.8 
12.3 
16.0 
14.3 
13.5 
17.3 
15.7 
17.9 
14.9 
14.4 
13.5 
17.7 
16.5 
15.6 
12.0 
14.9 
15.6 
18.3 
18J 

% of the total 
number of enterprises3 
20.3 
19.4 
28.0 
40.0 
33.3 
27.6 
30.0 
34.0 
28.1 
26.7 
30.5 
29.8 
24.4 
23.7 
27.3 
29.4 
12.4 
26.1 
29.3 
17.9 
: 

1 Wholesale and retail trade including recovery and repair. 
2  Gross  Domestic  Product at market prices. 
3  Share of wholesale and retail trade, data for 1987-1994. 
4  West  Germany. 
5  Excluding recovery and repair. 
6  Gross  Domestic  Product  : 1992. 

Source: Eurostat. 

!ï 

Figure 1: Share of commerce in GDP (1991) of countries of the European Union 

Ireland  t^&#?&#&&3&&&&&v&&&f#t 

Finland  Ë 

Germany  Ê 

Greece E M M S S HS 

UK 

i 
m 

Sweden E22; 

Denmark  ESSS 

France  KS&S&s 
^ 

Netherlands 

Austria 
Luxembourg E 

Spain 

E 

Belgium  E S 2 S 2 MS 

Italy 

i 

Portugal  H 

0 

3 

il 

1 

H3 

3 

8 

10 

12 

14 

16 

18 

% of GDP 

o?G 

2- Enterprises and employment  in European  commerce 

2.1- Absolute  figures  on  numbers of enterprises  and numbers  of  persons  employed  confirm  the  quantitative 
significance  of  commerce.  At the  beginning  of the  1990s there were  more  than  4.5  million  enterprises  and 
more than 22  million  persons  employed  in commerce.  The  vast  majority  of  enterprises  are  small, since  the 
average  number  of gainfully  employed  persons  per enterprise  is 4.9 for  commerce  as a whole,  of which  6.3 
in wholesaling  and 4.4 in retailing. 

Table  2.1:  Enterprises and employment  in commerce. Absolute values  (in  '000) 

Number of  enterprises 

Number of persons  employed 

Wholesale  trade 

Retail 

Total 

Year 

Wholesale  trade 

Retail 

Total 

Year 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 
Italy  l 
Luxembourg 

Netherlands 

Austria 

Portugal 
Finland  l 
Sweden 

United 
Kingdom2 
EU 15 
Iceland  u 
Norway  M 
EEA 

United  States 

Japan 

72.9 

37.8 

123.8 

196.8 

1991 

47.6 

85.4 

1992 

186.1 

435.5 

621.6 

1993 

46.8 

73.1 

198.6 

245.4 

1993 

569.7 

642.8 

1992 

106.1 

417.2 

523.3 

1994 

3.4 

29.3 

32.7 

1993 

234 

166 

1692 

108 

485 

975 

45 

275 

199 

509 

1992 

365 

1992 

3285 

4978 

1993 

471 

579 

1993 

1537 

2022 

1992 

2040 

3015 

1994 

151 

196 

1993 

235.6 

888.3 

1124.0 

1991 

1078 

2389 

3467 

1990 

2.1 

75.8 

18.0 

28.4 

18.3 

39.7 

3.4 

5.5 

1993 

102.9 

178.7 

1994 

40.0 

58.1 

1994 

132.1 

160.5 

1993 

28.3 

46.6 

1993 

61.4 

101.1 

1993 

1991 

142.7 

348.2 

490.9 

1086.9 
1.4 

3426.5 
1.6 

20.2 

38.3 

1108.5 

3466.4 

363.9 

300.0 

1589.1 

1300.0 

4513.4 

3.1 

58.4 

1992 

1993 

4574.9 

1953.0 

1600.0 

1987 

1988 

12 

403 

196 

197 

89 

191 

921 

mm 
7 

107 
lltll 
5609 

4332 

20 

32 

1993 

637 

1040 

1994 

290 

364 

486 

1994 

561 

1993 

116 

205 

1993 

288 

479 

1993 

3030 

3951 

1991 

15215  22112 

8 

15 

123 

230 

1992 

1993 

15346  22357 

12820  18429 

6851  11183 

1987 

1991 

Persons employed: full-lime equivalent. 

2 Persons employed in retailing : 1980 
-*'  Wholesale trade: including motor vehicles 
^ Data on local units 

Source: Eurostat. 

IV 

tf 

2.2-  Five  countries  account  for  the  major  share  of  enterprises  in  the  European  Community:  Italy  (almost 
25%),  Germany  (14  %),  Spain  (14 %), France  (12 %)  and the  United  Kingdom  (11%).These  countries  also 
have the  largest  shares  in terms  of  employment,  but  in a different  order:  Germany  (23  %), United  kingdom 
(18.%),  Italy  (16 %),France  (14.%)  and Spain (10.%). 

Table  2.2:  Breakdown  of  commerce  in the  European  Union 

Number  of  enterprises 

Wholesale  trade 

Retail  Total 

Number  of persons  employed 

Wholesale trades  Retail 

Total 

Shares 
(%) 

6.7 
3.5 
17.1 
4.3 
6.7 
9.8 
0.3 
21.7 
0.2 
7.0 
1.7 
2.6 
1.7 
3.7 
13.1 

3.6 
1.4 
12.7 
5.8 
16.6 
12.2 
0.9 
25.9 
0.1 
3.0 
1.2 
3.9 
0.8 
1.8 
10.2 

4.4 
1.9 
13.8 
5.4 
14,2 
11.6 
0.7 
24.9 
0.1 
4.0 
1.3 
3.6 
1.0 
2.2 
10.9 

3.4 
2.4 
24.5 
1.6 
8.6 
14.1 
0.7 
1.5.6 
0.2 
5.8 
2.8 
2.8 
1.3 
2.8 
13.4 

1.8 
1.3 
21.6 
3.1 
10.9 
13.4 
1.0 
15.7 
0.1 
4.2 
1.9 
2.4 
0.8 
1.9 
19.9 

2.3 
1.6 
22.5 
2.6 
10.2 
13.6 
0.9 
15.7 
0.1 
4.7 
2.2 
2.5 
0.9 
2.2 
17.9 

il00;0 

100.0  100.0 

100.0 

100.0  100.0 

Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United 
Kingdom 
EU  15 

V 

olcP 

3- Retail outlets  in the  European  Union 

The number of retail shops  in the countries of the  European  Union  is estimated  at almost 4  million. They  are 
situated  primarily  in  Italy,  France,  Germany,  Spain  and  the  United  Kingdom.  The  ratio  of  the  numbers  of 
shops  to  enterprises  is  15,  a  measure  of  the  predominance  of  enterprises  with  one  shop.  The  number  of 
shops  per  1  000  inhabitants  is  obviously  very  high  in  countries  with  a  strong  tourist  industry  such  as 
Portugal,  Greece,  Italy,  but  this  is  not the  only  relevant  factor,  as demonstrated  by  the  number  of  persons 
employed  per shop.  The United Kingdom has the highest  number  of persons employed  per shop and one  of 
the  lowest  number  of  shops  per  1  000  inhabitants.  Greece  and  Italy  have  the  shops  with  the  smallest 
number of persons employed. 

Table  3: Retail outlets  in the  European  Union  (1990) 

Number  of  outlets 
1 
(1000) 
140.0 
51.5 
533.7 
184.9 
523.2 
546.1 
31.7 
983.0 
4.4 
119.4 
52.5 
190.0 
39.7 
72.2 
466.6 
3939.0 
1.7 
39.5 
3980.2 
1929.3 
1619.8 

Belgium  2 
Denmark 
Germany  3 
Greece  2 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal  2 
Finland 
Sweden 
United  Kingdom  2 
EU 15 
Iceland 
Norway 
EEA 
United  States 
Japan 
1  Data for 1986-1990. 
2  Eurostat estimate. 
3 West Germany. 

Source: Eurostat. 

Outlets  per 
1000 
inhabitants 

Employees 
per outlet 

2.0 
3.9 
4.4 
1.8 
2.7 
3.8 
4.1 
2.4 
4.1 
3.4 
4.8 
3.1 
4.6 
4.2 
6.5 
3.5 
4.7 
3.1 
3:6 
6.6 
4.2 

14.1 
10.0 
8.5 
18.4 
13.4 
9.7 
9.0 
17.1 
11.6 
8.0 
6.9 
19.2 
7.9 
8.5 
8.1 
11.3 
6.7 
9.3 
11.2 
8.3 
13.3 

VI 

Figure 2:  Density of retail  outlets (1990) 

Austria 

Finland 

Netherlands 

UK 

Sweden 

Germany 

Ireland 

France  1 

Denmark 

l2 

I uxembourg  E 

mmm 

.}  .gium 

Italy 

Greece i 
-i 

Portugal  fcwssa 

5 

10 

N ir>iLier of outlets per 1000 inhabitants 

20 

VII 

JO 

4- Breakdown  of retail enterprises  by activity 

Taking the  European  Union  as a whole, almost  31%  of  enterprises  primarily  sell food  and  beverages,  18.5% 
clothing  and  footwear,  13.4%  household  appliances.  Thece  percentages  vary  considerably  from  country  to 
country.  For example, food  retailing  is particularly  highly developed  in the  Mediterranean  countries,  but  also 
in  Ireland  and  in  the  United  Kingdom.  However,  it  should  not  be  forgotte.i  that  some  of  the  divergences 
may arise from difficulties  in classifying  enterprises by activity. 

Table 4: Breakdown  of  œtail enterprisas by main sector  of activity  (%) 

Food, 
beverages, 
tobacco 

Textiles, 
clothing, 
footwear 

Household 
appliances 

Motor 
vehicles, 
including 
fuel 

Belgium 
Denmark 
Germany 
Greece  1 
Spain 
France 
Ireland2 
Italy 
Luxembourg 
Netherlands 
Austria1 
Portugal 
Finland 
Sweden 
United 
Kingdom 
EU 15 
Iceland  3-4 
Norway  1 
Ilillllll 

28.0 
24.5 
20.8 
29.5 
39.7 
26.1 
54.0 

33.3 
23.8 
20.0 
27.2 
39.7 
24.3 
23.1 
36.7 

30.8 
30.7 
29.2 
30.8 

18.2 
16.4 
15.6 
19.5 
20.3 
19.0 
9.0 
22.8 
18.8 
18.3 
"7.3 
18.8 
13.4 
1". 

6 

18. 
19.1 
16.3 
18.5 

12.7 
16.8 
16.9 
14.8 
13.4 
11.2 
4.4 
11.7 
15.6 
21.1 
7.4 
7.4 
10.2 
18.2 
15.7 

13.4 
1 1 
^.3 

13.3 

10.0 
13.9 
12.5 
7.7 
3.2 
15.3 
11.5 

6.1 
15.5 
8.3 
12.6 

5.5 
13.1 
12.4 
24.6 

10.2 

12.1 

10.2 

Miscell 
aneous 
31.1 
28.5 
34.2 
28.5 
23.4 
28.4 
21.0 
26.0 
26.4 
32.4 
35.5 
28.6 
39.1 
30.6 
14.4 

Total  Year 

100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 

1988 
1992 
1992 
1988 
1988 
1992 
1988 
1991 
1993 
1994 
1994 
1993 
1993 
1993 
1992 

27.1  100.0 

41.2  100.0  1992 

34.1  100.0  1993 

27.2  100.0 

1  Data relating to local unit. 
2  Food, beverages, tobacco, including cafés where more than 50 % of alcoholic drinks are consumed 
on the premises 
3  Data for retail outlets 
4  Excluding motor vehicle distribution.. 

Source: Eurostat. 

VIII 

3/ 

5-  Employment  in retail  distribution 

At  the  beginning  of  the  1990s,  slightly  more  than  70%  of  the  active  population  in  commerce  were 
employees,  of which just  over  55% were women, while  part-time  working  was  particularly  prevalent  (almost 
28%  of  total  employment).  The  Mediterranean  countries,  Greece  and  Italy,  are  those  which  have  fewest 
employees:  in  these  countries  independent  traders  predominate.  In  contrast,  in  the  countries  of  northern 
Europe,  the  percentage  of  employees  is  80%  or  higher. 
In  the  case  of  female  employment,  the  average 
level  (55%)  is exceeded  in  most  countries  of  northern  Europe  and Austria  while  Greece,  Spain,  France  and 
Italy  record female  employment  levels  below the  average.  The  frequency  of  part-time  work  appears  linked 
to that  of female  employment  and is particularly  high in northern European countries. 

Table  5: Employment  characteristics  in retail  distribution 

Share  of total employment %) 

Belgium  J 
Denmark 
Germany 
Greece ^ 

Spain 
France  3 
Ircland4 

Italy 
Luxembourg D 
Netherlands" 
Austria  7 
Portugal 
Finland  ° 
Sweden 
United Kingdom** 
EU  15  9 
Iceland 

Norway 
EEA  10,11 

Employees  Women 

54.1 
84.9 
84.8 
28.9 
55.4 
78.0 
72.9 
33.6 
87.4 
80.0 
84.9 
75.8 
81.0 
79.8 
84.4 
70.5 
85.8 
89. Q 

58.1 
52.5 
64.8 
43.6 
51.9 
50.3 
45.6 
44.4 
51.6 
56.7 
62.4 
43.4 
68.8 
60.8 
58.4 
55.2 

63.0 
5513 

Part-time 
workers 
17.4 
35.0 
39.0 
3.3 
6.4 
19.3 
23.2 

11.5 
34.6 

13.0 
5.1 

38.2 
38.4 
111 

47.0 
28:2; 

Year 
1989 
1992 
1993 
1988 
1992 
1993 
1991 
1991 
1993 
1990 
1991 
1993 
1993 
1993 
1991 

1992 
1993 

Part-time workers:  Eurostat  estimate. 
Employees  and  part-time  workers:  Eurostat  estimate. 
Women:  1989' 
Women  : Eurostat  estimate  1988. 
Women  and  part-time workers:  Eurostat  estimate  1989. 
Women  : Eurostat  estimate. 
Part-time workers:  1988. 
Excluding  motor vehicle  distribution 

Share ol  part-time workers:  excluding  Italy and  Finland.. 
0 Share  of women:  excluding  Iceland. 
1  Share  of  part-time workers:  excluding  Italy,  Finland  et Iceland. 

Source:  Eurostat. 

IX 

3L 

Figure 3:  Share of employees  in total  employment  (1988-1993) 

Italy  "k 
H 
Belgium  pi 

Spain 

Ireland 

Portugal 

France 

Sweden fS 

Netherlands 

Finland 

-I 

UK 

Austria 

Denmark 

Germany 

Luxembourg 

10 

30 

40 

50 

60 

70 

80 

90 

%  share  in  total  employment 

6- Turnover  in  commerce 

At  the  beginning  of  the  1990s total  turnover  in  retail  distribution  in the  15 countries  of the  European  Union 
was  about  ECU  1600  billion.  By  comparison,  it  should  be<borne  in  mind  that  the  Gross  Domestic  Product, 
which  is the  sum of the  final  uses of goods  and services, was  estimated  at  ECU  5400  billion  in  1992.  Four 
countries,  Germany,  the  United  Kingdom,  France  and  Italy  accounted  for  74%  of  this  total.  The  average 
turnover  per  enterprise  (ECU  471  000)  and  per  persons  emplayed  (ECU  110  000)  varies  greatly  between 
countries.  These disparities  are a clear  reflection of the very greg.t diversity  of  European  countries. 

Table  6: Characteristics  of turnover  in  retail  distribution 

Turnover 

Total 
(billion  ECU) 

Belgium 
Denmark 
Germany 
Greece 2 
Spain  ^ 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United  Kingdom  4 
EU 15 
Iceland 
Norway 
EEA 
t 
2  Eurostat estimate. 
3  Excluding enterprises in motor vehicle distribution. 

51.4 
24.8 
430.3 
20.0 
119.8 
260.0 
12.2 
230.0 
3.8 
69.3 
38.1 
26.5 
17.6 
39.6 
283.2 
1626.5 
1.1 
24.0 
1651.6 

%) 

3.2 
1.5 
26.5 
1.2 
7.4 
16.0 
0.7 
14.1 
0.2 
4.3 
2.3 
1.6 
1.1 
2.4 
17.4 
100.0 

Average turnover  per  : 
enterprise  persons  employed 
(1000 ecu) 
402 
522 
859 
114 
234 
563 
415 
259 
1106 
693 
951 
200 
622 
645 
813 
471 
645 
628 
473 
employed. 

(1000 ecu) 
187 
125 
131 
59 
86 
124 
92 
96 
193 
113 
131 
73 
151 
138 
93 
•ill! 
135 
195 
mm 

Year1 

1990 
1992 
1992 
1990 
1992 
1990 
1991 
1990 
1993 
1992 
1994 
1993 
1993 
1993 
1992 

1992 
1993 

Reference year for turnover.  May differ for enterprises and persons 

Turnover including VAT. 

Source: Eurostat 

X 

33 

7- Sales  formats 

During the  past thirty  years the general food sector  has experienced  a rapid development  of new sales 
structures  (discount  stores, supermarkets, hypermarkets).  These  new formats, which  are not  always 
initiated  by large  enterprises,  have substantially  reduced the  proportion  of traditional  sales formats.  Table 7 
shows that  in Germany,  Spain and the United Kingdom, they  account for 75% or more of food distribution. 

Table  7 : Market  share  of sales formats  in the food  sector (%)  (1994) 

Germany 

France1 

Italy' 

Spain" 

27.6 
29.7 
24.3 

81.6 
18.4 

4.0 
24.6 
30.5 

59.1 
40.9 

5.7 
27.2 
11.4 

44.3 
55.7 

9.0 
36.5 
30.5 

76.0 
24.0 

100.0 

100.0 

100.0 

100.0 

United 
Kingdom2 
9.0 
66.0 

75.0 
25.0 

100.0 

"Discount"  store 
Supermarket 
Hypermarket  (superstores  in the 
United  Kingdom) 
Sub-total 
Others  (mini-markets, traditional 
stores, convenience  stores) 
Total 

1 Of total food distribution. 
2 Of grocery distribution. 

Source: EHI.  INSEE, S&P. NIELSEN, IGD. 

8- The  main  distribution  groups  in the  world 

Table  8: The top  15 distribution  groups in the world 

Ranking 

Company 

Country 

1° 
2° 
3° 
4° 
5° 
6° 
7° 
8° 
9° 
10° 
11° 
12° 
13° 
14° 
15° 

(1)  Estimate 

Wal  Mart 
Sears Rebouck 
Metro-Kaufhof-Asko 
K  Mart 
Téngejmann 
Ito Yokado 
Carrefour 
The Daiei 
Edeka 
American  Stores 
Promodés 
Safeway 
Jusco 
Super Valu 
A & P 

USA 
USA 
D 
USA 
D 
J 
F 
J 
D 
USA 
F 
USA 
J 
USA 
USA 

1992 turnover 
(billion  dollars) 
51 
48 
43(1) 
35 
30 
24,5 
24 
19 
18 
17,5 
17 
15 
14 
12,7 
12(1) 

Source:  N. D.  Basile  & R.  Garosci "Commercio  e Grande  Distribuzione: La sfida del 2000" - 1995 

XI 

3^1 

9- Main  European  retail  distribution  groups 

The  market  presence  of  the  major  European  retailing  groups,  which  operate  mainly  in  the  food  sector,  is 
also  an  indication  that  concentration  has  advanced  more  rapidly  in  northern  Europe.  Within  the  leading 
European  retailing  groups,  the  first  sixteen,  classified  by  turnover,  are  German,  French  and  British.  The 
other  groups  come  from  the  Netherlands,  Belgium,  Sweden  and  Switzerland.  There  is  just  one  Spanish 
group  in  the  top  twenty-five.  Some  of  these  groups  have  speeded  up  growth  by  acquiring  corporations 
engaged  in  other  forms  of  retail  distribution.  One  name,  originally  active  in  the  wholesale  and  cash  and 
carry  market,  has  substantially  increased  the  retailing  share  of  its  total  sales  by  purchasing  large  chain 
stores and acquiring  holdings  in food distribution.  Large  mail order  companies  have  been  acquired  by  large 
chain store operators  for the same reason. 

Table 9 : Main  retailing  groups 

Group 
Tengelmann 
Metro  1 

Rewe 
Carrefour2 
Intermarché 
Leclerc 
Albrecht  (Aldi) 
Edeka 
J.  Sainsbury 

Promodès 
Tesco 

Pinault-Printemps 
Otto  Versand 
Spar 
Casino-Rallye 
Asko  3 
Ahold 
Karstadt  4 
Marks & Spencer 

Schickedanz  5 
ICA 
Delhaize  Le Lion 
El Corte  Ingles 
Argyll 

Vendex 
International 

Country 
Germany 
Germany 

Germany 
France 
France 
France 
Germany 
Germany 
United 
Kingdom 
France 
United 
Kingdom 
France 
Germany 
Germany 
France 
Germany 
Netherlands 
Germany 
United 
Kingdom 
Germany 
Sweden 
Belgium 
Spain 
United 
Kingdom 
Netherlands 

, non-food,  inter-industry, 
and-carry 

Main activity 
Food 
Food 
cash-
Food 
Food 
Food 
Food 
Food 
Food 
Food 

Food 
Food 

Chain  stores 
Mail order 
Food 
Food 
Food 
Food 
Large chain stores, mail  order 
Large chain stores, food,  clothing 

Mail order, food 
Food 
Food 
Large chain stores, food 
Food 

Non-food,  inter-industry 

1  Owns  Kaufhof  and  shareholdings  in Asko 
2  Owns  Euromarché. 
3  Owns Coop AG. 
4  Owns  Neckermann. 
5 Owns Quelle. 

Sources  : Eurostat:  Institute  of  Retail  Studies  (1RS), University  of Sterling. 

Turnover  1991-1992 

(billion  ECU) 
22.8 
22.6 

18.5 
16.2 
15.4 
15.3 
13.4 
13.2 
13.1 

11.0 
10.8 

10.7 
10.2 
10.1 
10.0 
9.9 
9.8 
9.3 
8.6 

8.4 
7.5 
7.3 
7.1 
7.0 

7.0 

XII 

75 

10- International turnover  of main  European  retailing  groups 

During the last ten years, wholesale  and retaile distribution  enterprises have stepped up initiatives  aimed at 
internationalisation.  In the case of food distribution, initiatives to expand internationally  have been taken 
mainly  by the following  countries: France, Germany,  United Kingdom, Belgium and the  Netherlands. 
Among the sales formats  most frequently  adopted outside  national frontiers  have  been the  hypermarket  (by 
French corporations)  and the discount  stores (by German  companies). 

Table  10 : International  turnover  of European  retailers  (1990-91) 

Corporation 

Country 

Main activity 

(Million  ECU) 

turnover  of the  group 

International  turnover 

Amount 

% of total 

Tengelmann 

Metro. 

Germany 

Germany 

Promodès 

France 

Delhaize  Le Lion 

Belgium 

Ahold 

Netherlands 

Food 
Food, non-food, inter- 
industry, C&C 
Food 

Food 

Food 

Otto  Versand 

Germany 

Mail order 

12 656.4 
6 036.1 

5 506.2 

5 283.0 

4 548.3 

3 602.2 

Carrefour 

Vendex 
International 
Aldi 

Ikea 

Auchan 

J.  Sainsbury 

Marks & Spencer 

GUS 

Au  Printemps 

La  Redoute 
Quelle 

Dixons 

Docks de  France 

Casino 

Ratners 

France 

Food 

" 

3 414.7 

Netherlands 

Non-food, inter-industry 

•  2 808.7 

Germany 

Food 

Sweden 

France 

United 
Kingdom 
United 
Kingdom 
United' 
Kingdom 
France 

Furniture 

Food 

Food 

Large chain stores, food, 
clothing 
Mail order 

Large chain stores 

France 

Mail order 

Germany 

Mail order 

United 
Kingdom 
France 

France 

United 
Kingdom 

Electrical goods 

Food 

Food 

Jewellery  and related articles 

2 520.0 

2 138.2 

1 413.2 

1 356.3 

1 055.5 

1 013.6 

986.0 

879.3 

759.9 

726.2 

508.4 

449.3 

348.2 

Sources  : Eurostat,  Institute  for  Retail Studies  (1RS), Sterling  University. 

55.7 

35.0 

34.4 

72.4 

50.6 

45.9 

31.1 

35.3 

20.0 

76.2 

15.3 

11.8 

12.7 

26.9 

20.2 

35.0 

10.6 

30.6 

13.3 

6.1 

27.6 

XIII 

3<* 

Table  11: Main  European  buying and distribution  groups(1993) 

Creation  date 

Base 

Turnover 
1991 (billion  ECU) 

1988 

Switzerland 

63.3 

1990 

Switzerland 

52.2 

1990 

Switzerland 

46.8 

1989 

Luxembourg 

21.9 

1988 

Germany 

43.0 

1989 

Belgium 

41.6 

1918 

Denmark 

36.9 

1990 

Netherlands 

31.5 

Group 

EMD 
(European  Marketing  Distribution 
AG) 

Deuro/MIAG 
(Deuro  Buying  AG/Metro 
International  AG) 
AMS 
(Associated  Marketing  Services) 

ERA 
(European  Retail  Alliance) 

Eurogroup 

CEM 
(Cooperation  Européenne 
de  Marketing) 

NAF 
(Nordisk  Andelsforbund) 

BIGS 
(BIGS  Buying  International  Group 
SPAR) 

Corporation 
members 
Markant (D) 
NISA Today's  (UK) 
Selex  (E,l) 
Zev-Markant (A) 
Superkob (DK) 
Musgrave  (IRL) 
Uniarme (P) 
Metro  (D,F,I,A,DK) 
Carrefour  (F,E,P) 
Makro  (NL) 
ICA (S) 
Kesko (SF) 
Allkauf  (D) 
Rinascente  (I) 
Hakon (N) 
Mercadona  (E) 
JMR  (P) 
Superquinn  (IRL) 
Ahold  (NL) 
Argyll (UK) 
Casino  (F) 
Rewe (D) 
Coop (CH) 
Paridoc (F) 
GIB Group (B) 
Vendex  Food (NL) 
Edeka  (D, DK) 
CRAI (I) 
Conad (I) 
Booker (UK) 
UDA (E) 
KF-group (S) 
Coop (DK, I) 
SOK  (SF) 
EKA  (SF) 
NKL (N) 
CWS  (UK) 
Spar(D,UK,A) 
Axel  Dagab (S) 
Unil (N) 
TukoSpar  (SF) 
Despar (I) 
Unigro  (NL) 
Dagrofa (DK) 
Unigrobel  (B) 
BWG  (IRL) 
Bernag Ovag  (CH) 
Hellaspar(GR) 

Sources  : Eurostat:  Cescom  - Bocconi  University,  Milan. 

XIV 

aï 

ANNEX  B 
AREAS  DIRECTLY  CONCERNING  COMMERCE  SUBJECT TO  NATIONAL REGULATIONS 

Rules  on  the  creation  of  enterprises 

Italy  and  Belgium  regulate  commercial  activities  by requiring  the possession  of a diploma  or 
professional  experience  in order to open a shop. In contrast, in France, Germany, Portugal and 
the  United  Kingdom,  only  some  activities,  such  as the  sale  of  arms  and  munitions  and  that 
of alcoholic  beverages, are regulated.  As regards  itinerant  trade an authorization  or licence  is 
generally  required  but  the  precise  means  and  conditions  vary  from  one  country  to  another. 
Furthermore,  it  is  the  local  authorities  which  regulate  the  conditions  for  the  exercising  of  a 
profession  in  a particular  area  (local  permits,  permitted  or  prohibited  zones). 

Regulation  of  the siting  and rental  of  commercial  premises 

As  regards  the  construction  of  commercial  premises,  in  Italy,  France  and  Belgium  specific 
regulations  requiring  the  authorization  of  stores  above  a certain  size  threshold  have  been  in 
force  since  the  1970s.  At  the  beginning  of  1996,  Spain  introduced  similar  legislation.  In 
other  Member  States, such as the Netherlands  and  Germany,  it is urban  planning  laws  which 
determine the use of building.  In effect,  each country has its own particular set of regulations. 
The same applies to regulations governing the rental of commercial premises with precise and 
relatively protective regulations existing in France, freedom  of negotiation between the parties 
in  the  United  Kingdom  and  a  variety  of  other  situations  in  between  in  the  other  Member 
States. 

Opening Hours 

One  of  the  most  representative  examples  of  differentiation  between  "national  policies"  are 
regulations  relating  to  shop  opening  hours,  legislation  which  can  have  an  important  impact 
in  border  areas.  As  a  result  of  cultural  and  historical  differences,  such  legislation  varies 
enormously  from  one  Member  State  to the  other.  In certain  countries,  France,  for  example, 
opening  hours are  not  regulated  directly  but  by  labour  laws.  As regards  Sunday  trading,  the 
situation  is even  more  complex  ranging  from  complete  freedom  to total  closure:  in  Scotland 
and  Sweden,  freedom  to open  is the rule; in France numerous exceptions exist  permitting  the 
employment  of staff,  while  the owner  may also open  on his own  if he so wishes; in Italy  and 
Greece  derogations  exist  for  tourist  regions:  in  Germany  virtually  all  shops  are  closed. 

There is no secondary  Community  legislation  in this field  and the Court of justice has had the 
opportunity  on  numerous  occasions  to  give  its  opinion  on  the  divergences  between  national 
legislation.  The court's position has always been the same:  it considers that these  regulations 
are the competence  of  the Member  States and  that Article  30 does  not apply  if the  regulation 
applies  in  the  same  way  to  all  economic  operators  selling  national  products  and  those 
originating  in other  Member  States,  both  in  law  and  in  practice.1 

See cases:  Torfaen  Borough  Council,  23.1 1.1989, C-145/88,  Rec. p.3851;  Conforama,  28.02.1991,  C-
3 12/89, Rec. p.997; Norwich  City Council,  16.12.1992, C-169/91 ; Punto Casa SpA, 02.06.1994. C-69/93 
and  C-258/93. 

XV 

3? 

Consumer  Protection  and  Unfair  Practices 

There are many  EU directives relating to consumer protection  and unfair  practices  (especially 
as  concerns  misleading  advertising,  general  product  safety,  doorstep  selling,  indication  of 
prices  and  labelling,  and  unfair  contract  terms),  but  national  regulations  are  still  important. 
The  EU  directives  in  question  may  constitute  for  many  Member  States  a  reference  base  on 
top of  which they  have  imposed  stricter  obligations  on commercial  enterprises.  In areas  such 
as  guarantees  of  consumer  goods,  regulation  continues  to  be  at  national  level  even  though 
there  is  Community  initiatives2. 

Major  differences  also  exist  between  regulations  relating 
to  promotional  activities. 
Accordingly,  in  Belgium  there  is  a  detailed  and  complete  regulation  on  the  subject  (law  of 
14 July  1991) covering  special promotions, sales, closing down sales, discounts and free  gifts. 
Selling  at  below  cost  price  in  Belgium  is  not  allowed.  In  Italy,  on  the  other  hand,  it  is 
permitted  (law  80  of  19 March  1980)  whereas  closing  down  sales  and  sales  in  general  are 
strictly  regulated.  Similarly,  in  the  United  Kingdom  and  France  it  is  obligatory  to  indicate 
both the original  price and the new price in the case of price reductions but  in Germany  there 
is  no  obligation  in  this  area. 

Proposal  tor  a directive  on  the sell  of consumer  goods  and associated garanties, COM(95)  520  final  of 
18.06.96 

X VI 

Si 

ANNEX  C  -  A  DETAILED  LIST  OF  COMMUNITY  LEGISLATIVE  MEASURES 

EU  legislation  directly  concerning  commerce 

There  are a number  of directives concerning the implementation  of freedom  of  establishment 
and  freedom  to  provide  services: 
i. 
ii. 
iii. 
iv. 
v. 
vi. 

wholesaling  (Directive  64/223/EEC), 
retailing  (Directive  68/363/EEC), 
commercial  intermediaries,  industry  and  crafts  (Directive  64/224/EEC), 
commercial  agents  (Directive  86/653/EEC), 
ambulant  trade  (Directive  75/369/EEC), 
teleshopping  (Directive  89/552/EEC  "Television  without  frontiers"). 

Technical  harmonization  and  the  removal  of  barriers  caused  by  differences  in 
national  product  legislation  (main  regulations) 

A  first  set  of  (horizontal)  directives  on product  composition  deals with product  ingredients: 
i. 
ii. 
iii. 
iv. 
v. 
vi. 

directive  on  authorised  food  additives  (89/107/EEC) 
directive  on  colouring  (62/2645/EEC  -  94/36/EC) 
directive  on  sweeteners  (94/36/EEC) 
directive  on  additives  other  than  colouring  or  sweeteners  (81/712/EEC  -  95/2/EC) 
directive  on  flavourings  (88/388/EEC) 
directive  on  the  inventory  of  the  source  materials  and  substances  used  in  the 
preparation  of  flavourings  (88/389/EEC) 
directive  on  preservatives  (64/54/EEC) 
directive  on  specific  purity  criteria  for  preservatives  (65/66/EEC) 
directive  on  emulsifiers,  stabilisers, thickeners  and  gelling  agents  (74/329/EEC) 
directive  on  specific  purity  criteria  for  emulsifiers,  stabilisers, thickeners  and  gelling 
agents  (78/663/EEC) 
directive  on  purity  criteria  for  antioxidants  (78/664/EEC) 
directive  on  erucic  acid  (76/621/EEC)  -

vii. 
viii. 
ix. 
x. 

xi. 
xii. 

The Directives  on manufacturing  methods regulate various aspects of the production  process. 

i. 

ii. 

directives  on  methods  for  the  quantitative  analysis  of  binary  textile  fibre  mixtures 
(72/276/EEC) 
directives  on  methods  for  the  quantitative  analysis  of  ternary  fibre  mixtures 
(73/44/EEC) 

A different  set of  directives  contain  (vertical) product  legislation for  specific food  products: 

i. 
ii. 
iii. 
iv. 
v. 
vi. 
vii. 
viii. 
ix. 

directive  on  cocoa  and  chocolate  (73/241 /EEC) 
directive  on  sugar  (73/437/EEC) 
directive  on  honey  (74/409/EEC) 
directive  on  fruit  juices  and  similar  products  (93/77/EEC) 
directive  on  fruit  jams, jellies,  marmalades  and  chestnut  puree  (79/693/EEC) 
directive  on  preserved  milk  (76/118/EEC) 
directive  on  edible  caseins  and  caseinates  (85/503/EEC) 
directive  on  natural  mineral  waters  (80/777/EEC) 
directive  on  other  water  for  human  consumption  (80/778/EEC) 

XVII 

id 

x. 

directive  on  coffee  and  chicory  extracts  (85/59/EEC) 

The  internal  market  program  lays  down 
composition  of  materials  and  articles  intending  to  come  into  contact  with  foodstuffs: 

the  following  packaging  directives  for  the 

i. 
ii. 

iii. 
iv. 
v. 

directive  on  vinyl  chloride  monomer  (78/142/EEC) 
directive  on  testing  migration  of  constituents  of  plastic  materials  and  articles 
(82/711/EEC) 
directive  on  ceramics  (84/500/EEC) 
directive  on  plastics  (82/711/EEC) 
directive  on  regenerated  cellulose  film  (93/10/EEC) 

Several  legislative  measures  relate  to product  safety  and hygiene: 

i. 
ii. 
iii. 
iv. 

directive  on  hygiene  and  foodstuffs  (93/43/EEC) 
regulation  on  contaminants  in  food  (93/315/EEC) 
directive  on  airborne  noise  emitted  by  household  appliances  (86/594/EEC) 
directive  on  toy  safety  (88/378/EEC) 

The  following  directives  and  regulations  with labelling: 

i. 
ii. 
iii. 
iv. 
v. 

vi. 

vii. 

viii. 
ix. 

directive  on  the  identification  of  foodstuffs  by  lots  (89/396/EEC) 
directive  on  nutrition  labelling  rules  (90/496/EEC) 
regulation  on  spirit drinks  (1576/89) 
directive  on  labelling  of  foodstuff  prices  (79/5 81/EEC) 
directive  on and resolution on the labelling of non-food  product prices (88/314/EEC -
Resol. of  07.06.88) 
directive  on  the  indication  by  labelling  of  the  energy  consumption  of  household 
appliances  (92/75/EEC) 
directive  on labelling  and standard product information  of the consumption  of  energy 
and  other  resources  by  household  appliances  (92/75/EEC) 
directive  on  textile  names  (71/307/EEG) 
regulation  on  geographical  indications  and  designation  of  origin  (Reg.  (EEC) 
n°208"i/92) 

The  following  legislation  deals  with  testing,  certification  and  enforcement: 

i. 

ii. 

iii. 
iv. 
v. 
vi. 
vii. 

directive  on  the  verification  procedure  of  purity  criteria  for  certain  additives 
(87/712/EEC) 
directive  on .the  certification  of  the  specific  character  of  foodstuffs  with  a  particular 
nutritional  purpose  (89/398/EEC) 
decision  on  the  standing  committee  for  foodstuffs  (85/7/EEC) 
decision  on  the  advisory  committee  for  foodstuffs  (80/1073/EEC) 
directive  on  the  official  inspection  of  foodstuffs  (93/99/EEC) 
directive  on  additional  measures  concerning  the  control  of  foodstuffs  (89/397/EEC) 
directives  on  methods of analysis necessary  for  checking the composition  of  cosmetic 
products  (80/1335/EEC,  82/434/EEC,  83/514/EEC,  85/490/EEC,  93/73/EEC) 

XVIII 

1/ 

Elimination  of  border  controls  and  abolition  of  border  formalities 

Several  regulations  and  directives  achieve  the  elimination  of  frontier  controls: 

i. 
ii. 
iii. 

iv. 
v. 

vi. 
xi. 

i. 

ii. 

iii. 

iv. 

v. 
vi. 

vii. 

viii. 
ix. 

x. 

xi. 

regulation  on  Community  Transit  (3648/91) 
regulation  on  the  use  of  TIR  and  ATA  carnets  in  Community  Transit  (3237/96) 
regulation  on  the  abolition  of  customs  formalities  at  internal  frontier  crossings 
(3648/91) 
regulation  on  the  elimination  of  transport  checks  at  frontiers  (4060/89) 
regulation  on  the  abolition  of  certain  internal  frontier  controls  into  the  filed  of  road 
and  inland  waterway  transport  and their transfer  to the Community's  external  frontier 
(4060/89) 
directives  on  exemption  from  VAT  for  the  final  importation  of  goods  (83/181/EEC) 
directive  on  the  refund  of  VAT  for  taxable  persons not  established  in the  country 
(79/1072/EEC) 

Indirect  taxation  (VAT  and  Excises)  -  Main  directives 

Sixth Council directive on the uniform basis of assessment (77/388/EEC, last amended 
94/42/EC)) 
Eighth Council directive relating to turnover taxes-refund  of value added tax to taxable 
persons  not  established  in the  territory  of  the  country  (79/1072/EEC) 
Thirteenth  Council  directive  relating  to  turnover  tax-refund  of  value  added  tax  to 
taxable  persons  not  established  in  Community  territory  (86/560/EEC) 

directive  on  excise  duties  : general  arrangements,  holding  and  movement  of  excise 
duty  products  (92/12/EEC,  amended  by  92/108/EEC  and  94/74/EC)) 
directive  on  the  approximation  of  taxes  on  cigarettes  (92/79/EEC) 
directive on the approximation  of taxes on manufactured  tobacco other than  cigarettes 
(92/80/EEC) 
directive  on  the  harmonization  of  structures  of  excise  duty  on  mineral  oils 
(92/81/EEC) 
directive  on  the  approximation  of  excise  duty  rates  on  mineral  oils  (92/82/EEC) 
directive  on  the  harmonisation  of  the  structures  of  excise  duties  on  alcohol  and 
alcoholic  beverages  (92/83/EEC) 
directive  on  the  approximation  of  the  rates  of  excise  duty  on  alcohol  and  alcoholic 
beverages  (92/84/EEC) 
directive  on  taxes  other  than  turnover  taxes  which  affect 
manufactured  tobacco  (95/59/EC) 

the  consumption  of 

The  liberalization  of  road  transport 

A quite  extensive  legislative  framework  underlies  the creation  of the  internal  market  in  road 
transport  by  trucks. 

i. 
ii. 

regulation  on  road  carriage  between  member  states (881/92/EEC  ) 
regulation  on  inland  cabotage  for  carriage  of  goods  by  road  (3921/91) 

XIX 

^ 

iii. 

proposal  for  a  directive  on  the  admission  of  the  occupation  of  road  transport 
operator  and  mutual  recognition  of  diplomas  (74/562/EEC). 

Relevant  Environment  Legislation 

regulation  on  a Community  eco-label  award  scheme  (880/92/EEC) 
directive  on  packaging  and  packaging  waste  (94/62/EC) 
directive  on  batteries and  accumulators  containing  certain  dangerous  substances 

i. 
ii. 
iii. 
(91/157/EEC). 

XX 

Uft 

ANNEX  D 
VARIOUS  ACTIONS  AT  COMMUNITY  LEVEL  AFFECTING  COMMERCE 

a.  Consumer protection  legislation 

It  is  traders  who  are  in  daily  contact  with  consumers  -  their  customers  -  and,  accordingly, 
commerce  and  distribution  are  very  much  involved  in  consumer  protection.  Consumer 
protection  regulations  are  currently  being  developed,  especially  as  regards  the  safety  and 
quality of goods, the security of transactions (in particular as regards indication of prices, unit 
pricing,  advertising,  consumer  credit  and  unfair  terms),  as well  as  guarantees  and  access  to 
justice.  Faced  with  these  changes,  which  have  a  particular  effect  on  the  daily  life  of  EU 
citizens, commerce  attaches a great deal of importance to providing  consumers with  adequate 
information  and  products  and  service  in conformity  with  the  law,  a process  which  begins  at 
the  point  of  sale.  The  Community  has  adopted  Directive  84/450/EEC  on  misleading 
advertising and a proposal on comparative advertising (modification  to the existing misleading 
advertising  directive)  .  Under  Council  Directive  85/374  concerning  liability  for  defective 
products,  liability  is  extended  to  importers  of  products  into  the  Community  and  to  suppliers 
when  the  producer  cannot  be  identified. 

b.  Competition  legislation 

The  Council  Resolution  of  10  October  1994  on  policy  favouring  SMEs  invited  Member 
States  and  the  Commission  to  examine,  via  mutual  consultation,  to  what  extent  legislative 
measures  in  the  Member  States  or  from  the  Commission  could  result  in  an  extra  burden 
specifically  for  SMEs,  in particular  by  "examining  the  possibilities  of  co-operation  between 
SMEs  (e.g.  co-operation  networks  for  joint  purchases  and  sales)  in  the  framework  of  EU 
competition  law". 

The  principles  set  out  in  Articles  85  and  86  of  the  Treaty  are  the  basis  of  the  system  of 
individual  and  categorical  exemptions,  franchising  in  particular  has  benefited  from  an 
exemption  since  1988.  The  Commission  is preparing  a Green  Paper  on Vertical  Restrictions 
which  will  give  an  overview  of  past  Commission  policy,  examine  how  and  to  what  extent 
agreements and exemptions have been implemented  and will set out the options for  future  EU 
action.  It  will  show  the  need  to  analyse  relations  between  the  producers,  wholesalers  and 
retailers. 

It is vital  to ensure that conditions for  fair  competition  between economic  actors exist,  whilst 
guaranteeing  the  same  market  opportunities. The  Commission will  continue  to examine  how 
to allow different  forms  of co-operation, and in particular  groups of traders, free  access to the 
forms  of  organisation  and  operation  which appear  best  suited for  the  market  situation.  How 
these developments  should  best be reconciled  with the need  to respect the principals  of  open 
access  and  non-discrimination  at  the  heart  of  competition  policy  is  being  examined  by 
Commission  services  at  present. 

c.  Food  legislation 

There  is  a  substantial  body  of  Community  legislation  relating  to  foodstuffs,  in  particular 

5 

OJ  C-294  of  22.10.94,  p.6 

XXI 

m 

measures concerning  labelling,  food  additives, materials  in  contact  with  foodstuffs  and  food 
hygiene.  Such legislation aims at a high  level of health  and  safety,  consumer  protection,  fair 
conditions  of  competition  and  ensuring  the  free  movement  of  goods  within  the  Internal 
Market.  The Commission intends to present a green Paper on the General Principles of Food 
legislation  at  EU  level. 

d.  Self-regulation 

Discussions on the regulation of commerce led the Commission in its Communication of 1991 
to  recommend  the  self-regulation  of  commercial  professions,  a  notion  supported  by  the 
Council, in its Conclusions of 30 June  1992.  As they are worked out by the professionals  and 
therefore  rely  on  civil  law  provisions between  economic  operators,  codes  of  conduct  obtain 
the  support  of  those  to  whom  they  apply.  Commerce  is  keen  on  European  codes  of  good 
conduct  between  businesses  or  between  businesses  and  consumers  because  they  provide  a 
flexible  legal framework  whilst respecting the principle of judicial  security  in  complementing 
the  body  of  Community  legislation.  They  favour  the  smooth running  of the  internal  market 
and  of  competition  by  reducing  trade  barriers  between  Member  States  through  the 
harmonisation  of  commercial  practices.  Furthermore,  they  favour  economic  efficiency  by 
reducing  conflicts  with  clients,  notably  by  allowing  the  quick  settlement  of  international 
lawsuits by way of mediation and arbitration. The Commission has already  indicated that out-
of-court procedures may play an important role in settling consumer disputes whenever  certain 
minimum  criteria  have  been  established  to  ensure the transparency  of  the  procedure  and  the 
independence  of the  body  responsible for  dealing  with the disputes4. Within  this  framework, 
professional  organisations represented  in the  CCD have  drawn up  and  presented  to the  CCD 
for  discussion  and  approval  professional  codes  of  conduct  relating  to  franchising,  distance 
selling  and  in  1995  direct  selling. 

e.  Transport policy 

Efficient  and reasonably  priced transport is vitally  important to the present and future  success 
of commerce and distribution especially taking into account trends in locational  manufacturing 
and population  shifts, the dispersal of economic activities, and increasing shipment  frequency 
of decreasing size. Current  Community Transport policy will affect  the shape and to a certain 
extent the options available in transport in the coming decade. The Trans-European  Transport 
Network  will  provide  transport  corridors  from  one  end  of  Europe  to  the  other.  The 
Commission  is  furthermore  actively  seeking  to  promote  the  continued  development  of 
environmental  friendly  multi-modal  transport.  This  requires  a  balance  of  policies  favouring 
the  development  of  coherent,  integrated  transport  systems  for  the  Community  as  a  whole. 
Several  policy  initiatives  adopted  recently  by  the  Commission  promote  the  development  of 
efficient,  sustainable  and  smooth transport  flow,  both  for  passengers  and  freight.  These  will 
affect  future  transport planning and costs and will affect  the operators of distribution  networks 
and  commerce  itself. 

/  Energy  policy 

The wheels of commerce  are  literally,  ciled by energy, be it as electricity  to  run the  business 

Commission Communication  "Action Plan on consumer access to justice and the settlement of consumer 
disputes  in  the  internal  market",  COM(96)  13 final  of  14.02.96. 

XXII 

or as transportation  fuel  to bring goods to market.  The Community  energy  legislation,  which 
aims  at  integration  of  the  energy  markets,  security  of  supply  and  environmental  protection, 
is therefore  important  for  the  development  of  commerce. 

In  particular,  the  current  initiatives  for  liberalising  the  internal  market  for  electricity  and 
natural  gas will contribute to more competitively  priced  energy  supplies for  the  development 
of  commerce.  In  addition,  this  integration  process  will  increase  the  total  volume  of 
commercial  activity  by  gradually  turning  gas  and  electricity  into  competitively  traded 
commodities. 

g.  Environment  policy 

The achievement  of a high level of environmental  protection throughout the European  Union 
constitutes  an  important  element  which trade needs to take into  consideration  with  a view to 
contributing to sustainable development. The Commerce represents a major  link in the product 
chain which has consequences for the environment,  as in the case of transport and packaging. 
Operators  in  the  Commerce  sector  are  companies  in  their  own  right  and  should  aim  to  use 
more  sustainable  means  of  transport  and  to  reduce  their  energy  use  and  waste  output.  One 
way  to  achieve  this  would  be to  establish  an  environmental  management  system. 

The  Commerce  sector  does not  only  have  effects  on  its own  stage  in  the  product  chain,  but 
due  to  its  intermediate  position this  sector  is able to  influence  both  manufacturers  as well  as 
consumers. This sector can encourage manufacturers to develop and produce greener products. 
The  Commerce  sector  also  has  an  important  role  to  play  in  achieving  waste  management 
objectives,  such  as  in  the  packaging  area,  the  promotion  of  recycling  and  the  creation  of 
markets  for  recycled  products  as well  as the collection  of data in the waste area.  In  addition, 
they  can  play  a  significant  role  in  providing  environmental  information  to  consumers. 

h.  Social  dialogue 

Sector-based  social  dialogue  on  commerce has taken  place  between  the  European  federation 
representing  wholesaling  and  retailing  (EuroCommerce)  and  the  European  trade  union 
representing  those  employed  in  the  area  (Eurofiet).  These  two  organisations  have  been 
pursuing  social  dialogue  since  1983.  In  1993, EuroCommerce  and  Eurofiet  recognised  each 
other  as  social  partners  within  the  meaning  of  Articles  3 and  4  of  the  Agreement  on* social 
policy.  This  social  dialogue  led  to  the  signature  in  1988  of  a  memorandum  on  training  in 
retailing.  Various  projects  have  been  pursued  by  the  social  partners  and  supported  by 
Community  grants  on  the  basis  of  a  transnational  partnership:  for  example,  a project  under 
the  FORCE  programme  concerning  the  long-distance  training  of  employers  and  employees 
in  commerce  and  another  project  called  ASSIST  relating  to  the  training  of  business  leaders 
of  SMEs  and  new  employees.  On  September  18  1996  the  Commission  approved  a 
communication  concerning  the  development  of  the  social  dialogue  at  community  level. 

/.  Statistics 

Without  reliable  information,  economic  operators  can  only  take  decisions  on  the  basis  of 
hypotheses  or  estimates,  a  process  which  itself  leads  to  inequalities  between  operators  as 
SMEs  lack  the  means  to  conduct  large  scale  research.  It  is  therefore  important  for  those 
involved  in  commerce,  be  they  economic  operators  or  public  authorities,  to  have  at  their 
disposal  statistics  and  economic  analyses  in order  to  facilitate  taking  the  necessary  decisions 

XXIII 

10 

and  to  respond  promptly  to  the  need  to  adapt. 

The  quality  of  the  statistical  information  on  distributive  trades  is not  at present  sufficient  to 
provide  more  than  a  general  overview  of  the  situation  and  trends  in  distribution.  The 
development,  in  co-operation  with  Eurostat,  of  a  real  European  system  of  statistics  on 
commerce  will  make  it  possible  to  analyse  the  economic  facts  at  Community,  national  or 
regional  level.  It  is necessary  to  improve  the  availability  of reliable,  comparable  and  up-to-
date statistics by making  them  a priority  and by putting  statistical information  at the  disposal 
of  users, especially  enterprises, by means  of  European  institutional  and  electronic  networks. 

Accordingly,  to  improve  statistical  information  an annex  on  "commerce" was integrated  into 
the  proposed  rules  on  structural  statistics  on  business  presented  by  the  Commission  on 
3  April  19955, and  which  is now  awaiting  adoption  by  the  Council.  In  parallel,  an  annex  to 
the  draft  regulation  on  short  term  statistics  is  currently  being  discussed  with  the  Member 
States,  and  should  shortly  be  proposed  to  the  Council.  Professionals  have  supported  this 
initiative  within  the  CCD:  if  business  charges  are  to  be  reduced  as  much  as  possible,  some 
reliable  and  detailed  statistics  are  indispensable  to  the  economic  players.  Some  statistical 
studies  have  been  prepared  and  published  by  Eurostat  in  collaboration  with  DG  XXIII6. 
Methodological  manuals  have  been  drawn  up  and  are  available  to  national  statisticians  in 
order  to  have  accurate  and  comparable  statistics  in  the  different  countries  of  the  European 
Union. 

j.  Pilot  programmes 

the  modernisation  of  commercial  enterprises 

The  Commission  encourages 
through 
COMMERCE 2000 pilot programmes.  These actions, supported directly by the Commission, 
seek to promote commercial co-operation through the use of new technology, give prominence 
to  good  practices  and  provide  help  in  choosing the right  technology,  taking  account  of  each 
situation.  The  results  already  received  have  shown  the  impact  of  new  technologies  on  the 
process  of  commercial  co-operation,  and  the  importance  of  training  to  accompany  the 
changes. 

k. Structural  policies 

EU  Structural  Funds  allotted  to different  objectives  and  different  regions do  not  exclude  the 
to  commerce  if  the  Member  State  or  region  believes  that 
possibility  of  intervention 
It  should  be  recalled  that  within  the 
commerce* is  vital  to  the  revitalisation  of  an  area. 
framework  of the  Structural  Funds, the Commission's goal is of territorial  development:  these 
interventions in favour  of commerce must therefore  be placed amongst the elements of a more 
global  development  or  reconversion  strategy  which  implies  integrated  and  programmed 
actions.  Portugal,  for  example,  envisaged  that,  from  the  first  phase  of  programming  of  the 
Structural  Funds  in  1988, but especially for  the programming  period  1994-1999, a part of the 
operational  programme  relating  to  the  modernisation  of  the  economic  tissu  deal  with 
commerce  and  services. 

5  OJ  C-146  of  13.6.95 

6 

"Retailing  in the  European  single market  1993" and  "Retailing  in the  European  economic  area",  1993 
and  1995,  EUROSTAT  and  DG  XXIII 

XXIV 

If} 

Community  initiatives,  which  complement  the  programmes  adopted  by  the  Member  States, 
are  programmes  for  a  precise  area  or  theme  which  will  bring  about  14  Mrd.ECU  to  the 
Member  States  from  1994-1999. 
Several  initiatives  are  particularly  concerned  with 
commerce: the Community initiative in favour  of SMEs (in particular the national  programme 
submitted  by  Spain  includes  specific  actions aimed  at commerce  and  distribution),  ADAPT, 
URBAN,  LEADER  and  INTERREG. 

Another example, for the new programming of Objective 2 (economic conversion of declining 
industrial  areas)  for  the  period  1997-1999,  the  Commission  provided  Member  States  with 
guidelines  and  details  concerning  ways  of  taking  into  account  retail  trade  within  the 
framework  of  a  more  global  policy  of  urban  renewal  and  the  redevelopment  of  run-down 
areas.  Installations and collective services geared to the development of neighbourhood  shops 
could  benefit  from  aid  from  the  Structural  Funds  in  areas  in crisis, characterised  notably  by 
high  levels  of  unemployment  and  high  insecurity.  The  refurbishment  of  buildings  and  run 
down  commercial  centres  could  also be taken  into  account. 

As  a result  of participating  in  local  development,  commerce  can use  Structural  Funds  to  aid 
its  modernisation. 
It  is  a  matter  of  raising  the  awareness  of  business  leaders  in  order  to 
prepare  them  for  the  changes  to  come:  technical  assistance,  presentation  of  "model" 
businesses, etc, creating  co-operation  and partnership networks of small enterprises  whatever 
the  legal  form,  of  which  none  is  preferred  over  and  above  the  others  (Buying  groups, 
voluntary  chains  or  franchise  networks),  and  modernising  and  bringing  up  to  date  outlets 
promoting  the  concept  of  high  performance  distribution  managed  within  the  framework  of 
independent  organised  commerce. 

Moreover, the development  of the use of new technologies  for communication  infrastructures 
and  point  of  sale  management,  and  training  programmes,  relying  on  innovative  support, 
adapted  to the needs of traders can  be aided  via Structural  Funds, as can the  implementation 
of  financial  engineering.  Commercial  enterprises  offer,  as  far  as  finance  is concerned,  little 
in  the  way  of  real  guarantees,  and  to  favour  investment,  it  is  necessary  to  support  financial 
engineering techniques such as the development.of guarantee funds  and mutual security  funds. 
The  recent  decision  of  the  EIB  to  finance  commerce  is  a  positive  step  to  promote  the 
It  is  up  to  the  Member  States,  however,  to  propose 
development  of  commercial^  SMEs. 
operational  programmes  and  to  accept  any  local  or regional  proposals  including  commerce. 

/.  Training support 

As  far  as  training  is  concerned,  a  significant  number  of  pilot  projects  which  have  received 
Community  support  under  the  LEONARDO  DA VINCI  programme7  are of  direct  benefit  to 
SMEs  in the  commerce  and  distribution  sector.  This  programme  has  as  a  particular  aim  the 
encouragement  of access for  small and medium-sized enterprises and their employees. Within 
the  framework  of the  first  call  for  proposals  launched  in  1995, numerous  vocational  training 
pilot  projects  involving  SMEs  from  the  trade  and  distribution  sector  were  initiated  :  for 
example,  a transnational  project  aiming  to anticipate  the  effects  of the  changes  which  occur 
in the trade  and  distribution  sector  for  employees  in less qualified  jobs. Another  pilot  project 
attempted  to  develop  a vocational  training  system  for  the  benefit  of  SMEs'  managers  in  the 
craft  bakery  sector. 

OJ  L-340  of  29.12.94  p.8 

XXV 

H2 

nu Relations  with  Central  and  Eastern  Europe  and 
non-European  Mediterranean  third  countries 

The  modernisation  of  commerce  in the  Central  and  Eastern  European  Countries  (CEEC),  is 
important  for  promoting  the  economic  integration  of  the  countries.  On  the  proposal  of  the 
Committee on Commerce and Distribution, three panels of professionals were created  in 1995 
and visited Russia, Ukraine and Hungary, to identify  the main problems facing  commerce and 
distribution  in these  countries and  to determine the areas in which  the professionals  and their 
federations  could  help  them.  New  missions  will  be  set  up  in  1996,  as  far  as  possible  in 
liaison with the Phare and Tacis programmes, in particular, to co-finance management training 
and  technical  assistance to  develop  logistical  distribution  structures  adapted  to  local  needs. 

A similar formula  could be used in order to reinforce  historical  links between  the  distribution 
systems of the Mediterranean  littoral  states.  Such actions for  training and technical  assistance 
could  be  inserted  into the  framework  of  the principles  set out  in the  "Barcelona  Declaration" 
adopted  at  the  Euro-Mediterranean  Conference  of  17-18 November  1995. 

X X VI 

if\ 

ANNEX  E -  INSTITUTIONNAL  ADRESSES 

EUROPEAN  PARLIAMENT 

Rue  Belliard  97-113 
B  -  1047  Bruxelles 

"Commerce  and  Distribution"  Inter-group 

Chairman: 
Vice-Chairman: 

Mr  Garosci 
Mr  Gasoliba  I Bôhm 
Mr  Lange 
Mr  Secchi 
Mrs  Thyssen 

Tel.:  32-2-  284  25  96  (M.  Licandro  - General  Secretary) 
Fax:  32-2-  284  90  36 

ECONOMIC  AND  SOCIAL  COMMITTEE  OF  THE  EUROPEAN  COMMUNITIES 

Rue  Ravenstein.  2 
B  -  1000  Bruxelles 

Directorate  A:  Industry  section 

Members  of  the  "Commerce"  Category 

Messrs. 

Mrs 
Messrs. 

Andrade 
Folias 
Frerichs 
Giesecke 
Green 
Regaldo 
Stollnberger 

Tel:  32-2-  546  95  98  or  546  96  33 
Fax:  32-2-  546  97  57 
e-mail:  Joao.PereiraDosSantos@Ces.be 

COMMITTEE  OF  THE  REGIONS  OF  THE  EUROPEAN  UNION 

Rue  Ravenstein.  2 
B  -  1000  Bruxelles 

Tel:  32-2-546  22  11 
Fax:  32-2-546  28  96 

XXVII 

^ 

ISSN 0254-1475 

COM(96) 530  final 

DOCUMENTS 

EN 

02  10  08  06 

Catalogue  number  :  CB-CO-96-600-EN-C 

ISBN 92-78-11749-8 

Office  for  Official  Publications of the European  Communities 

L-2985  Luxembourg 

57