Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Setting up a European retail action plan’ COM(2013) 36 final
Date: 2013-07-10
Institutions: European Economic and Social Committee
Subjects: consumer information, innovation, retail trade, small and medium-sized enterprises, social partners, vocational training








C_2013327EN.01002001.xml










12.11.2013   


EN


Official Journal of the European Union


C 327/20





Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Setting up a European retail action plan’
COM(2013) 36 final
2013/C 327/05
Rapporteur: Ms RONDINELLI

On 18 March 2013, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Setting up a European retail action plan

COM(2013) 36 final.
The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 27 June 2013.
At its 491st plenary session, held on 10 and 11 July 2013 (meeting of 10 July), the European Economic and Social Committee adopted the following opinion by 174 votes to one with three abstentions.
1.   Conclusions and recommendations







1.1


The Committee supports the holistic approach taken by the action plan and has already given its views on many of the 11 actions proposed, which will require time and support (including economic support) to be put into effect.










1.2


The Committee considers that some actions may not be implemented or completely feasible because they do not take account of the impact of the economic crisis on the sector, particularly in the countries hardest hit by austerity measures.










1.3


The Committee recommends that, when implementing the plan, the diversity of forms that SMEs and microenterprises often take should be taken into account and harnessed.










1.4


The Committee welcomes the proposal to set up a permanent Group on Retail Competitiveness and hopes that the European social partners and representatives of consumer and SME organisations will be part of it.










1.5


The Committee recommends that relevant and truthful information be made available and truly accessible to consumers, in a form which is both concise and easily understandable (avoiding technical or legal language).










1.6


The Committee recommends that the Member States be encouraged to define which forms of retail can be included among the general interests (social and cultural) referred to in the Services Directive.










1.7


The Committee asks that businesses be encouraged to integrate online and offline trade (in many cases, businesses give priority to just one form), with a view to overcoming problems related to opening hours and days when shops are closed.










1.8


The excessive concentration in the distributive trades poses various problems, including difficulties in achieving genuine competition.










1.9


The EESC recommends that abusive transfer pricing, which is a way of setting the prices of transactions within the same group on the basis of evaluation criteria that reflect the fiscal requirements of the group concerned rather than the natural market conditions, should be addressed at European level, as already recommended in a Committee opinion (1).










1.10


The Committee recommends working towards a sustainable retail sector and the reduction of waste, partly by promoting the roll-out of a dispensing-based sales system which cuts back on packaging which is a source of pollution.










1.11


The Commission should strive to achieve innovation and change using all the instruments available to it, as competition is a condition for change but will not trigger change on its own.










1.12


The Committee considers that matching up the professional skills needed and the skills possessed by workers is crucial, and believes that corporate involvement should include targeted investments as well as influencing the curriculum of training courses.










1.13


Building on the experience of the European Skills Council for Commerce, the Committee urges the Member States to set up bilateral bodies between the social partners to develop professional training (matching, training schemes, financing, identifying training needs, and carrying out and getting feedback on training).










1.14


The Committee endorses the Commission's move to initiate dialogue with all stakeholders to define effective measures at EU level to combat the informal economy and undeclared work. It hopes that the Member States will bring strong political will to bear which the Commission will be able to coordinate via an enhanced partnership.




2.   Achieving a single market in the distributive trades







2.1


In order to achieve the single market in the distributive trades, the action plan proposes a roadmap of five priorities and 11 actions within the framework of the Europe 2020 strategy, to be carried out by 2014. The Commission will be responsible for monitoring and in 2015 will submit a progress report.










2.2


In the EU, the distributive trades are crucial for stimulating growth, job creation and more sustainable innovative consumption patterns. The sector represents 11 % of GDP and almost 15 % of jobs, accounting for almost 36 million employees in over 6 million businesses, which comprise 29 % of all businesses and include a very high level of SMEs and micro-enterprises.










2.3


The plan shows that the distributive trades are increasingly integrated with other economic sectors and that the distinction between them is fading. It points out that obstacles remain to the creation of an efficient, competitive and integrated single market in the distributive trades. It is therefore essential to make the sector more competitive and productive and to improve its economic, social and environmental performance, taking into account its diversity in general and the situation of SMEs and microenterprises in particular.










2.4


The Committee points out that, despite efforts over the last two decades to modernise the sector, many SMEs in the retail sector are failing. This is partly due to rising price competition and falling profit margins, and partly to the economic crisis which has brought about a contraction in consumption and dissuaded people from buying.










2.5


The financial crisis, rising prices of raw materials, demographic ageing, the drive for greater sustainability and technological innovation (e.g. electronic payments, self-scanning) are revolutionising business processes and models both in large-scale commercial chains and in SMEs.










2.6


The Committee welcomes the proposal to set up a permanent Group on Retail Competitiveness (involving Member States, stakeholders and SMEs) to bring the problems besetting the sector to the fore in European political debate, identify avenues for development, monitor progress and prepare recommendations. The Committee calls for the European social partners in this sector (UNI-Europa commerce and Eurocommerce), which have been engaged in constructive social dialogue since the late 1980s, to be part of this group as representatives of civil society, particularly consumer and SME organisations.










2.7


The Committee urges the Commission and the Member States to encourage and support all fair and balanced forms of collaboration and trade associations between independent businesses as well as between large retail companies and independent businesses on the basis of contracts with clear, balanced guarantees.




3.   Consumer empowerment (actions 1 and 2)







3.1


Rights only really exist when they are exercised, and for that they need to be known. Information does not equate to knowledge, the primary right of consumers which gives them the freedom to make their choices in pursuit of wellbeing and individual and collective convenience. These days, many purchase choices are accompanied by a vast quantity of available information.










3.2


One of the chief problems currently affecting the sector is the large retail companies' marketing strategy, which focuses almost exclusively on the price for the consumer and overlooks value for money. In many Member States, the result is a drop in the quality of food products, partly because natural ingredients are replaced by substitutes. This reduces the choice available to consumers who would often be prepared to pay more for a good quality product but cannot find one in the range on offer.










3.3


Knowledge of product features enables people to make informed choices, thus spurring on quality, diversification and service in the product range. However, an increase in available information does not equate to an increase in knowledge, and in fact the opposite is often true: faced with an excess of information, consumers often choose not to read it owing to lack of time and the overly technical, incomprehensible language used.










3.4


In addition to drawing up guidelines on good practice and codes of conduct (action 1) (2), the Commission should establish effective, binding instruments requiring producers and distributers to provide consumers with accessible information on all the features of their products, services and prices which are vital for other social, environmental, territorial and economic purposes. In addition, all necessary information should be made available in concise, easily understandable form. They can then freely decide which of these features they will give priority to and not base their choice solely on marketing aspects.










3.5


The supply system generates a wealth of knowledge which is useful to consumers when making their choices, but that knowledge is largely concentrated on product aspects linked to purchase and initial use, focusing on initial satisfaction and overlooking the later stages in the product's lifecycle (to what extent the packaging can be recycled, duration of performance, whether assistance and spare parts are available, value in the event of the item being sold on second hand, after-sales services).










3.6


As well as proposing methodologies for measuring and communicating the overall impact of products and organisations (action 2) (3), the Commission should take on the task of supplementing the knowledge that shapes consumers' purchase choices (4). In doing so, it should provide clear indications regarding:






—


the extent to which products and packaging can be recycled;










—


the amount of packaging actually needed (for the purposes of transport, provision of useful information, conservation and hygiene, ensuring that the product is in good condition throughout the period of use) compared to the large amount which can be dispensed with;










—


the extent to which the production and distribution sectors comply with standards in the areas of production, environmental protection and workers' rights;










—


ease of access to after-sales services.














3.7


The Committee therefore proposes that this action should be implemented effectively and realistically in the interests of consumers, ensuring stronger protection, and of companies (particularly SMEs), ensuring that they know how to implement it in practice.




4.   Better access to more sustainable and competitive retail services (actions 3, 4 and 5)







4.1


When prohibiting the imposition of compliance with certain requirements, the Services Directive stipulates that "this prohibition shall not concern planning requirements which do not pursue economic aims but serve overriding reasons relating to the public interest" and "This Directive does not affect the freedom of Member States to define, in conformity with Community law, what they consider to be services of general economic interest". The Directive clearly states that these "overriding reasons relating to the public interest" include "the conservation of the national historic and artistic heritage; social policy objectives and cultural policy objectives".










4.2


Some forms of retail are characteristic of the local culture and lifestyle. These and only these forms should be able to compete in a system of similar businesses which continually seeks improvements in quality and efficiency in the interest of consumers. Exposing such businesses to the aggressive tactics of large organisations could uphold free market principles in the short term but would result in the probably permanent loss of a cultural and lifestyle heritage, thereby weakening the community and the area, not least from an economic point of view.










4.3


Competition has forced retail businesses to deliver better service and become more efficient. It is imperative that the Commission distinguish between healthy competition between similar businesses (which drives the pursuit of continual improvements in quality and efficiency, in the interest of consumers) and other forms of economic and commercial conflict between businesses.










4.4


It is important for areas to have healthy competition between businesses in the sector, regardless of their size, not with a view to aggressive tactics but so that each business spurs on the others in a virtuous circle. This will result in better services, a wider selection, more user-friendly organisation, better prices and a local identity.










4.5


When the economic strength of major chains undermines traditional shops, this should be recognised as a loss as it destroys part of the cultural and lifestyle heritage as well as the economic and social fabric of that area and community, which is worth more than the mere convenience of selection and prices for the consumer.










4.6


With regard to actions 3 and 4, the Commission, in line with the Services Directive, should encourage the Member States to assess whether and which forms of retail can achieve these social policy and cultural objectives. Therefore, the Commission should promote the inclusion of traditional independent local retail in general interests, where retail reflects local culture and characteristics. However, it is important to ensure that local vested interests do not masquerade as general interests of the community such as the environment and land use. The Commission should therefore state very clearly what constitutes acceptable general interests of a region, and even ask each region to draw up a list of three priority interests in order of importance to be used as criteria when assessing new commercial establishments.










4.7


Online retail cannot replace bricks-and-mortar retail, but the two models need to find ways to integrate, particularly since retail has a key role to play in society beyond simply supplying goods and services at low cost.










4.8


The Committee calls on the Commission, hand in hand with the Member States and in cooperation with SME organisations, to spur on SME training on integrating various types of sales alongside traditional forms.










4.9


The growth potential of online trade cannot be predicted with any certainty because it is dependent on how the markets and institutions will regulate it. The Commission should initiate and facilitate all actions that will enhance the value of non-sale services (which do not relate directly to a specific purchase) performed by offline retail.










4.10


Shops currently offer customers many services free of charge (for instance window shopping), with the cost reimbursed by the margin on sales. Producers therefore often deter online purchasing, obliging customers to buy offline. However, increasing numbers of consumers now combine purchasing techniques: comparing products and prices online and physically handling the product and trying it out offline. The Committee recommends rendering this online/offline competition obsolete by integrating and developing services delivered by traditional shops, since shopping in person leads to real, physical social interaction which cannot be converted into digital interaction: integration is needed, not replacement.










4.11


The Committee points out that Member States have different legislation on retail business opening hours and opening on Sundays and at night. These rules are under discussion in many Member States in terms of competition between independent businesses, SMEs and micro-enterprises, and impact on staff. The Committee asks the Commission to overcome this barrier to the completion of the single market and the European social model, partly by integrating online and offline trade.




5.   Better commercial relationships throughout the retail supply chain (action 5)
 (5)







5.1


The Committee considers that the distributive trades sector is one of the most highly concentrated. The market in every Member State is controlled by three to five companies, often multinationals. This poses major problems in terms of competition, as the sector has far too much power over suppliers which are much greater in number.




6.   Developing a more sustainable retail supply chain (actions 6 and 7)







6.1


The Committee supports action 6, which is aimed at supporting retailers in implementing actions to reduce food waste (6) and welcomes the decision to adopt a communication on sustainable food in 2013.










6.2


The Committee supports action 7, which aims to "make supply chains more environmentally-friendly and sustainable" by using every means possible to cut back on energy use and the production of materials which are a source of pollution. With regard to such materials, the Committee suggests promoting a distribution model for general consumer goods based on dispensers as an alternative to packaged products. The Committee asks the Commission to consult all stakeholders with a view to implementing this action, intended to reduce the production of packaging which will then have to be disposed of.










6.3


This practice is used in a handful of situations and for a very small number of products but could be applied much more widely:






—



Less packaging. By purchasing a product via a dispenser, consumers would be discouraged from buying a new container: they could re-use the one they already have.










—



Improved hygiene. The dispenser would protect the product more effectively as the product would not be handled by people who then did not buy it.










—



Less waste. A dispensing system enables people to specify the amount purchased; they will not be forced to buy products in containers which do not match their needs – a major source of waste.










—



Better communication for brands. Dispensers are generally bigger than individual packs, and the area thus available could be used to convey more information than would be possible on a smaller label.














6.4


This model is currently used in small-scale situations, for instance selling fresh milk, and fuel for vehicles is already sold on a huge scale using the dispensing model. The product itself is not environmentally-friendly but the distribution of it does not generate a single gram of plastic nor is any of it wasted.










6.5


This model would entail changing the way that sales points are set up; they would need to arrange warehouse-to-shelf re-supply pipes or at least systems for refilling the dispensers. In any case, shop shelves would no longer be static and bland.










6.6


To have a real chance of success, this shift in model would have to be pushed by the major distributors responsible for most consumer products which would have the capacity and the resources needed to kick off this game-changing process. SMEs would also need to play a key role.










6.7


The Commission could help kick-start this change, raising awareness of the social and environmental advantages and using every instrument available to it (including economic and financial instruments) to promote and facilitate practical initiatives and projects.




7.   More innovative solutions (actions 8, 9 and 10)







7.1


Recovery in the real economy is partly dependent on innovation in this sector (action 8) and it is crucial that SMEs have more and easier access to bank loans so that they can begin innovative projects and activities.










7.2


Unlike past developments in the USA, business investment in innovation must be combined with employee protection and job quality.










7.3


The Commission seems to expect these changes to result from enhanced retail competitiveness – boosting this competitiveness is the sole purpose of the actions proposed in the communication. However, while a lack of competition hinders change, competition per se does not guarantee change.










7.4


The Commission, when it describes retail businesses as "innovation multipliers", recognises that SMEs in the retail sector, being in closer contact with consumers, have a better grasp of new needs and so, as they are also more flexible than large companies, they are better able to match supply to the varying and varied demand.










7.5


However, some changes in system and model require planning capacity and above all bargaining power – meaning that large companies have to be involved. The Commission must strive to include all small, medium and large companies in the processes of innovation and change.










7.6


The Committee welcomes the creation of a database containing all EU and domestic food labelling rules (action 9) (7).










7.7


The Committee supports the Commission's moves to ensure better market integration for card, internet and mobile payments (action 10) (8) and hopes that this will be rolled out swiftly.




8.   Better working environment (action 11)







8.1


Matching up skills is essential for improving the quality of jobs (9) in the sector, which often serves as the way into or back into the labour market and is not generally seen as an attractive, interesting sector in which to spend one's entire working life.










8.2


In order to make the retail sector more competitive and productive, employers' requirements and employees' skills need to match up more closely (action 11); employees need to be given the opportunity to enhance their performance, partly in response to rising levels of automation.










8.3


The Commission aims to step up cooperation between the social partners in order to improve training and reskilling policies, partly through the EU Sectoral Skills Council.










8.4


Despite technological innovation, productivity in the sector is still relatively low and SMEs struggle to invest in new technology, innovation and staff training.










8.5


However the action plan cannot overlook the fact that within the single market, the sector is being hit by social dumping and unfair competition between retail businesses, regardless of their size. This is because industrial relations and collective bargaining systems vary from one country to another, resulting in different development models and investment policies.










8.6


One limiting factor in the analysis is that it refers only to skills-needs matching and does not consider the host of problems preventing the establishment of an integrated, competitive European single market in this sector, in terms of working conditions, organisation of work, low salaries, flexibility, insecure employment and a high rate of false self-employed.










8.7


The communication proposes investment in training, responsibility for which would fall to governments, individuals and the education system, calling on companies to play an important part in preparing new programmes for study, training and traineeships. The Committee considers that company involvement should extend beyond identifying training needs; they should also be proactive, investing in the skills they want (10).










8.8


Public and private investment together would aid young people to enter the labour market, as well as groups which find it very difficult to break back in (long-term unemployed, older workers, immigrants and people with disabilities). Efforts should focus on women who are in greater danger of losing their job following restructuring and who have more problems balancing home life and work.










8.9


Matching up skills, strengthening school-business partnerships and traineeship-based training schemes cannot deliver the expected results in terms of employee mobility and higher productivity in the sector unless it is accompanied by EU-wide recognition of formal qualifications, traineeships, apprenticeships and acquired skills.










8.10


Despite efforts at national level undeclared work is still a serious problem, with companies competing unfairly in the area of labour costs. Workers in the informal economy have no access to health and welfare systems, or to training and traineeship schemes which obviously damages their chances of acquiring professional skills.










8.11


The Commission's move to initiate dialogue with all stakeholders to assess the informal economy's impact on labour conditions and to define effective measures at EU level to combat it, is laudable. The Committee considers that the more political will the Member States bring to bear, the more effective this initiative will be; the Commission could coordinate this via an enhanced partnership.










8.12


The Committee considers that measures on combating undeclared and informal work must remain a discussion point for the social partners as part of the European social dialogue (11).





Brussels, 10 July 2013.


The President of the European Economic and Social Committee

Henri MALOSSE





(1)  EESC opinion on Tax and financial havens: a threat to the EU's internal market, points 3.25 and 3.26, OJ C 229, 31.7.2012, p. 7.

(2)  The report on Comparison Tools was presented at the European Consumers' Summit on 18 March 2013.

(3)  Building the single market for green products, adopted by the Commission on 9 April 2013.

(4)  Examples of information which have become knowledge: the source of meat and the meat industry, regional coverage of mobile phone signals, the zero-food mile sector in the agri-food industry.

(5)  EESC opinion on Unfair trading practices / supply chain (See page 26 of this Official Journal).

(6)  EESC opinion on the Prevention and reduction of food waste, rapporteur: Mr Somville; OJ C 161 of 6.6.2013, p. 46.

(7)  OJ C 198, 10.7.2013, p. 77 and OJ C 204, 9.8.2008, p. 47.

(8)  OJ C 351, 15.11.2012, p. 52.

(9)  32 % of employees are not or are only partly qualified, compared to the average of 27 %; 15 % of employees in this sector are under 24, against an average of 9 %; 60 % of employees are women.

(10)  In some countries, such as Italy and France, inter-professional training funds in the context of bilateral bodies or joint committees have produced interesting results.

(11)  Joint opinion issued by UNI-Europa Commerce and Eurocommerce on 24 April 2012.