Competitiveness

AIM Brief: Examples of Unfair Trading Practices in the European Supply Chain

The objective is to ensure a competitive and fair level playing field for all involved, whether upstream or downstream, including addressing unfair practices across all channels to ensure a healthy, sustainable value chain.

The members of AIM believe that Principles of Good Business Practice as well as legislation that sanctions unfair practices provide a framework for doing business which will ensure competitiveness, trust and continuity, all required for business development, sustainability and strong innovation. Ultimately, these will benefit consumers, companies and society.

Unfair practices are sources of business disruption and economic inefficiencies, challenging Europe’s competitiveness goals. They adversely affect companies’ capacity to innovate and invest for the long term. This innovation and investment is needed to constantly improve value to consumers and fulfil the EU’s objective to create smart, sustainable and inclusive growth.

AIM Factsheet: Differentiation in products and prices across shops and geographical areas

Differentiation is at the core of any business strategy. It addresses the challenge of attracting a consumer to select a specific product, or buy in a certain store, rather than a competitor’s product or store. The greater the differentiation, the more consumer loyalty grows.

Also, consumer prices are set by retailers, with regard to their business strategy, the nature and the intensity of the their competitive environment, and their consumers. Price is a marketing tool used to support retail differentiation strategies. Consumer prices are dynamic: prices vary across the weeks through promotions, with retailers adjusting their prices due to the activities of their competitors, and their own business needs.

More details are outlined in our Insights section here.

In an omni-channel world brand manufacturers are challenged to deliver products wherever and whenever the consumer requires it, whilst driving down carbon emissions and waste.

Distribution is fragmenting and is expected to “Uberize” and disrupt the transport industry. ECommerce pure players emerge with new logistics requirements. Legislation to curb negative effects of transport, whilst keeping EU transport industry competitive and protecting drivers is increasing. All of this requires the FMCG industry to develop new supply chain capabilities, which can be accelerated by leveraging the scale and the trusted power of brands.

The members of AIM are working on the following three objectives:

1. Give consumers access to brands anywhere anytime through collaborative and efficient last mile supply chains, with focus on eCommerce platforms and digital supply chains.
2. Lead in society with brands that aspire to zero carbon and zero waste supply chains with focus on scaling horizontal collaboration activities for asset sharing (road, rails, warehousing) and engaging with supply chain innovation platforms.
3. Protect brands and have a level playing field for brands to compete for the consumer’s choice with focus on communication standards and transport legislation.

AIM-Progress is a forum of leading Fast Moving Consumer Goods (FMCG) manufacturers and common suppliers, assembled to enable and promote responsible sourcing practices and sustainable supply chains. It is a global initiative supported and sponsored by AIM, the European Brands Association.

The goal of AIM-Progress is to:

Positively impact people’s lives and ensure respect for human rights, while delivering value to our members and their supply chains.

Our members work together to co-create solutions and share best practices to drive positive impact, quickly, efficiently and at scale, within the branded consumer goods supply chain. We abide by applicable anti-trust legislation.

Our key objective is to build capability so that member organisations and their suppliers have the knowledge, confidence and ability to develop and execute robust responsible sourcing programmes.

• We focus on the issues that matter – respect for human rights.
• We aim to drive positive impact through responsible sourcing.
• We prioritise practical action, not just conversation, to create lasting change in global supply chains.
• We believe in collaboration between brands and suppliers (with due respect for anti-trust legislation).
• We believe in building partnerships and networking.
• We collaborate to drive convergence in approaches to responsible sourcing.

Brands manufacturers have long been supporters of the Single Market as we can only gain from the economies of scale the Single Market brings. It remains one of Europe’s primary ways to create sustainable, long-term growth.

We also respect the EU motto of “United in Diversity”. There is no one homogenous, identical European consumer – we are fortunate to celebrate differences across the continent in terms of tastes, preferences, culture, history and background within one country and even within one region or town, as well as at national or European level.

Brands manufacturers develop products in response to this constantly evolving and diverse situation as trends create new expectations and inspire new products, tailoring to local cultures as well as global trends. One could argue that it would be easier and cheaper for the branded goods industry to ignore this and just offer one product to all consumers in Europe. However, that is not Europe, and would not respond to European consumers. As a consumer-centric industry, our approach is to respond to consumers who inspire the diversity and wealth of products available across the European market. To do this, the industry has developed efficient processes to manage its innovation, production, logistics, sales, distribution and marketing, responding to a market-driven approach.