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AIM welcomes European Parliament’s reminder to investigate retail alliances’ unfair practices

Brussels – 17 May 2022 – The Plenary of the European Parliament adopted on 5 May 2022 its annual own-initiative report on EU competition policy outlining its policy recommendations for the European Commission in the area.

AIM, the European Brands Association, applauds the EP’s reminder to “the Commission to urgently conduct an in-depth analysis of the extent and effect of buying alliances, thereby devoting special attention to guaranteeing fair competition and greater transparency in supermarket and hypermarket chains’ commercial practices, particularly where such practices affect brand value and product choice or limit innovation or price comparability.”

Several MEPs from across the political spectrum had already asked the Commission in a recent joint parliamentary question when it intended to “deliver on Parliament’s call for action […], by launching an investigation into [European retail alliances]’ functioning and anti-competitive practices.” The EP resolution also “welcomes the Commission’s determination to […] avoid unfair and unreasonable commercial practices, draw[ing] attention to the rising exploitative and exclusionary practices.”

“As the Horizontal Block Exemption Regulations and Guidelines are being revised, we encourage the Commission to take the views of the European Parliament into account and to address the behaviours of certain retail alliances within these revised rules,” observed Michelle Gibbons, Director General of AIM.

“With input costs, such as raw materials and energy, soaring as global supply chain disruption continues, a robust competition policy framework is of paramount importance in such turbulent times. The EU Single Market can also help overcome such challenges, which is why we call on the Commission to consolidate it further by harmonising current different national regulations in force across Member States (e.g., on packaging or labelling), whilst maintaining a consumer-centric approach,” remarked Michelle Gibbons.

Although the EP reminded “the Commission to address the anti-competitive effect of territorial supply constraints”, AIM wishes to recall that DG GROW already commissioned a study on TSCs, which found that “actual evidence on TSCs is far from conclusive” and that “no hard or documentary evidence [on TSCs] is available”[1]. Furthermore, the study’s analysis of the impact of alleged TSCs on prices and consumer expenditures was undermined by various data problems, as well as conceptual and methodological flaws. In particular, it failed to properly consider the various factors falling outside manufacturers’ control, such as heterogeneous consumer preferences, manufacturing and trade costs, and national labelling, packaging and recycling regulations, which can objectively justify manufacturer practices unduly tagged as “restrictions” or “constraints”.

[1] European Commission, “Study on territorial supply constraints in the EU retail sector”, 19 November 2020.