ASEDAS Spanish Association of Distributors, Self-Service Facilities and Supermarkets

Transcription

1 ASEDAS Spanish Association of Distributors, Self-Service Facilities and Supermarkets CONTRIBUTION FROM THE SPANISH ASSOCIATION OF DISTRIBUTORS, SELF-SERVICE FACILITIES AND SUPERMARKETS (ASEDAS) TO THE EUROPEAN COMMISSION REPORT ENTITLED "RETAIL MARKET MONITORING: TOWARDS MORE EFFICIENT AND FAIRER RETAIL SERVICES IN THE INTERNAL MARKET FOR 2020". The Spanish Association of Distributors, Self-Service Facilities and Supermarkets (ASEDAS) is one of the main organisations representing food distributors in Europe. More than 400 supermarket chains are members together, they cover six million square metres of commercial surface area dedicated to food, providing services to Spanish consumers and giving employment to over workers. Our association strongly approves of the Commission initiative which ended with this study, as: it is based on an accurate analysis of the real importance of our sector for both the welfare of citizens and for prosperity, employment and growth in the European Union; it correctly places consumers at the centre of all the efforts made by our sector on a daily basis, and stresses that the actions taken by the stakeholders in the value chain and the assistance provided by from the public authorities must be geared towards consumers; it makes it possible to identify a number of problems which may lead to shortcomings in the supply chain, on which our sector has been working for some time, but for which support from the Community institutions and the Member States can be crucial in the future. In view of this positive opinion, our association wishes to make the following comments on behalf of our member companies. We will try to put forward succinct opinions based on information on the main problems detected in the report: 1. ON THE POSSIBLE MALFUNCTIONING OF THE MARKETS DUE TO TOWN PLANNING PROBLEMS WHICH LIMIT CONSUMER ACCESS TO EFFICIENT COMMERCE AND CAN CAUSE SUPPLY PROBLEMS

2 As representatives of local commercial businesses, we share the Commission's concern, although we consider that the scale of this problem cannot be generalised for the different Member States. We therefore we believe it is important to provide information relating to the extent and structure of the food trade in Spain. There are over points of sale for food in Spain, including hypermarkets, supermarkets, discount shops and traditional shops. In our opinion, such variety makes commerce more accessible to consumers and is the result of considerable efforts on the part of businesses in the sector (See the figures at the end of this point with official data on food expenditure and on how the market is divided between the various types of outlet). However, although the problems linked to town planning do not jeopardise the adequate level of commercial provision in Spain, they do generate very high regulatory costs which have repercussions on the competitiveness of businesses and, ultimately, are paid for out of the consumer s pocket. Accordingly, we consider that the report should help to further develop measures to reduce regulatory costs, cutting red tape and in particular eliminating unjustified or disproportionate authorisations, along the lines set by the Directive relating to internal market services. Figure 1. Distribution of household food expenditure in Spain. Source: Ministry of the Environment, Rural and Marine Affairs Market share in households. Percentages (value) [table illegible in original] Figures 2 and 3: Market share by type of outlet and country. Source: Nielsen [table illegible in original]

3 Format structure Europe 6% 15% 1*% 14 u /u 13% 13% 13% 12% 12% irao CM D

4 2. ON THE ALLEGED "ABUSE OF POWER" IN DISTRIBUTION, THROUGH THE IMPOSITION OF ABUSIVE CLAUSES VIS-A-VIS SUPPLIERS We agree entirely with the Commission's description of this debate which, as stated in the document, is very complex and on which generalisation is by no means possible. In this respect, also based on the information available concerning Spain, we consider it important to point out that: in the case of fresh products where farmers' requirements often clash with distributors' demands almost 50% of the food market in our country (see figure 1) is in the hands of traditional and independent shopkeepers, meaning that it is not possible to talk about an abuse of power here; also in the case of farmers, it is important to point out that the only point of contact between major distribution companies and producers are fruit and vegetable wholesale markets or cooperatives which concentrate supply in one place and add value and profits to the agricultural product (e.g. packaging). Considered together with the previous point, it is not possible to claim that there is an imbalance in terms of the number of stakeholders on either side of the chain (see figure 5); furthermore, the information on supermarket concentration corresponds only to the comparable surface area in self-service facilities for pre-packaged food. Again, the levels of concentration are lower in Spain than in other EU countries. In any case, this concentration is very similar to the concentration of the main leading industries to which it is related (dairy products, soft drinks, chocolates, baby foods, etc.) Therefore, in the light of the actual data, the distribution sector cannot be said to have a level of concentration or presence on the food market which would constitute a dominant position vis-à-vis other links in the chain and, much less, which would enable it to impose abusive clauses. Furthermore, these clauses and the practices to which they give rise are already prohibited by Community and Member State legislation, backed up by the competition authorities. This information is often withheld by those calling for stricter regulation to protect the market position of a specific sector. Such practice is very worrying. We believe that the public authorities should concentrate on ensuring maximum compliance with the rules on competition when alleged abuses can be confirmed. However, more preventive regulation in our sector is unjustified in reality and, rather than helping to improve sector efficiency or benefit consumers, would have the opposite effect.

5 Figure 4. Level of concentration of the main retailers by EU Member State. Source: Nielsen 2009 Country Number 1 Number 2 Number 3 Combined Market Share (%) Switzerland MICROS COOP VOLG 96% Sweden ICA KF-COOP AXFDOD 89% Denmark COOP DANSK SUPERMARKET SUPERGRŪS 86% Finland SOK KESKO TRAŰEKA 86% Norway MORGESGRUPPEN COOP ICA 81% Austria BML-REWE SPAR HOFER-ALDI 77% Belgium DELHAIZE CARREFOUR COLRUYT 70% Ireland MUSGRAVE TESCO DUNNES 63% UK TESCO ASDA SAINSBURY'S 60% Germany EDEKA REWE ALDI 58% Spain (2003) CARREFOUR MERCADONA EROSKI GROUP 56% France CARREFOUR LECLERC CASINO 55% Netherlands ALBERT HEIJN SCHUITEMA ALDI 53% Slovakia COOP TESCO BILLA 48% Portugal зомде JMR INTERMARCHE 47% Czech Republic AHOLD TESCO KAUF LAND 38% Greece CARREFOUR ALFA.BETA LIDL 37% Hungary TES CO CBA COOP 35% Italy COOP CONAD CARREFOUR 33% Poland BIEDRONKA TESCO CARREFOUR 16% Figure 5. Estimated number of stakeholders in the value chain in Spain RES EN LA CADENA NUMERO DE ACTA Points of sale for food, traditional shops, supermarkets and hypermarkets Source: Economic yearbook of La Caixa and Allmarket m Number of food industry businesses Source: EIE and DIRCE i^ Number of agri-food cooperatives & I Source: agri-food cooperatives w

6 3. THE POTENTIAL "PROBLEM" WHICH COULD BE CAUSED BY DISTRIBUTORS' LABELS It is evident that relations between producers and distributors as regards distributor-brand products differ from company to company. Hundreds of models for these relations therefore exist (and for relations with third parties). In its document, the Commission considers that these models should be studied to identify the potential implications for consumers and the potentially dominant position of distributors vis-à-vis producers. Once again, the debate appears to focus on the demand for regulatory measures which limit the development of own-brand products by distributors. In this respect, and based on experience in Spain, we wish to make the following comments: most major food industry businesses in Spain manufacture goods under their own brand alongside goods which bear the brand name of one or more distributors (see table 6). This means that, in practice, a very high percentage of stakeholders on both sides of the chain have common features and share commercial strategies. In other words, very few manufacturing companies are adversely affected by distributor-brand products and require protective regulation, although they can have a significant impact on the market; consumers accept and demand this type of product presentation because they appreciate many of its commercial attributes (for example, trust in the distributor's choice of products). Furthermore, it is obvious that distributor-brand products are gaining more ground in areas where there is a greater difference in price between distributorbrand products and the leading brands. In this respect, Spain, which is one of the countries in which distributor-brand products have gained the most ground in recent years, also shows a comparatively large price difference with manufacturer brands (see table 7); as for the alleged "dominant position", the alleged abusive practices on the part of distributors using own-brand products are already prohibited, and the authorities must monitor the situation. On this subject, the recent example of the Comisión Nacional de la Competencia de España (National Competition Commission of Spain) is very interesting: it brought proceedings based on a complaint by milk producers regarding the alleged discriminatory behaviour of distributors in favour of their own-brand products and against producer-brand milk. Its conclusions included the following statement: "...Given the distribution of market share among the various operators (...), the possibility of any company being in a dominant position can be ruled out... " (Page 9) 6

7 "...Dominance in the vertical relationship does not usually imply a dominant market position (...) for this reason, the complaints regarding abuse of a dominant position by distributors vis-à-vis their suppliers cannot be upheld. " (Page 11) Comisión Nacional de la Competencia de España. Proceedings S/0165/09 of 15 June 2010 Figure 6. Number of industry leaders manufacturing distributorbrand products and producer-brand products in Spain Data in Spain on distributor-brand and producerbrand products 66 of the 100 companies with the highest turnover in Spain manufacture both distributor-brand and producer-brand products 3 of the 100 companies with the highest turnover manufacture only distributor-brand products 31 of the 100 companies with the highest turnover manufacture only producer-brand products (half in the beverages sector) Source: UGT study on the leading 100 companies in Spain Figure 7. Price differential between distributor-brand and producer-brand products in Spain and other Member States THE PRICE DIFFERENTIAL BETWEEN DISTRIBUTOR-BRAND AND PRODUCER-BRAND PRODUCTS IS THE HIGHEST IN EUROPE

8 4. PRICE DIFFERENCES BETWEEN THE VARIOUS MEMBER STATES According to official statistics, food prices in Spain are among the lowest in the EU-15 and are below the EU-27 average (see figure 8). In our opinion, this is due to many factors, including the fact that our distribution system is very efficient and competitive, and consumers benefit from this. In order to support this statement, we must examine the levels of competition and sectoral concentration in the various EU Member States (referring back to figures 2 and 4) in conjunction with prices (figure 8) and levels of income in the countries which, theoretically, should determine the price level. If we put together all the above elements (figure 9), we can conclude that some countries have a more efficient distribution system than others (those below the line in figure 10) Take Italy, for example: a major foodproducing country with income levels very similar to those of Spain and which, nevertheless, shows price levels much higher than those of Spain. All of this is related to the distribution structure which, in our opinion, must be taken into careful consideration in the Commission's reflections on this subject. Figure 8. EU prices. Source: Eurostat 2009 IS - lceland NO - Norway CH - Switzerland DK - Denmark«IE - Ireland Fl - Finland SE - Sweden LU - Luxembourg IT- Italy UK - United Kingdom AT - Austria BE - Belgium CY- Cyprus EU-15 FR - France DE - Germany EU-2S _ eu-27 EL - Greece ES - Spain HR - Croatia PT- Portugal NL - Netherlands Sl - Slovenia TR - Turkey IVIT -Ivittut EE - estonia IS/IE - Montenegro >4L - Albania HU - Hungary RO - Romania BA - Bosnia-Herzegovina CZ- Czech Republic LV- Latvia PL - Poland RS SK - Slovakia Serbian Republic LT - Lithuania BC3 - Bulgaria MKD - former Yugoslav Republic of Macedonia 1O ΘΟ

9 Figure 9. Correlation between food prices and income. Source: Spanish Ministry of Industry, Tourism and Trade, 2007 CORRELATION BETWEEN FOOD PRICES AND COUNTRIES PER CAPITA INCOME R?=D,5973 -o' ^ PER CAPITA INCOME 5. THE POSSIBLE CONTRIBUTION OF THE COMMERCIAL SECTOR TO THE REDUCTION OF CLIMATE CHANGE

10 Due to the service it offers to consumers, commercial activity clearly involves high levels of energy consumption. This means high costs for businesses, especially in times of crisis such as the current one. Therefore, businesses are the first to be interested in saving energy and are consequently making enormous efforts (energy-saving bulbs, reduction of lighting power, presence detectors, use of timers, redirection of heat from machinery to other areas of the shop or lock systems in cold chambers). However, the Commission's reflections on trade in the context of climate change are particularly relevant in view of consumer mobility and, specifically, the relationship between daily food purchases the type of purchase which generates the highest number of visits to shops and CO₂ and NOx emissions. On this subject, the Spanish experience can be summarised in a recent study on the impact of the food trade on mobility and emissions. The main conclusions of this study are set out below: according to official estimates, million purchases are made per year in Spain, (average number of visits by consumers: 16 per month); taking account of the percentage of economic transactions by outlet type Traditional shop 47% Supermarket (up to 2 500m²) 33% Hypermarket 7.6% Other 10.4% The means of transport used by consumers PURCHASES BY CONSUMERS TRAVELLING ON FOOT: Traditional shop 87.3% Supermarket (up to 2 500m²) 85.1% Hypermarket 18.8% Other 71.8% PURCHASES BY CONSUMERS TRAVELLING BY CAR Traditional shop 6.8% Supermarket (up to 2 500m²) 9.7% Hypermarket 73.7% Other 21.4% PURCHASES BY CONSUMERS TRAVELLING BY PUBLIC TRANSPORT: Traditional shop 5.9% Supermarket (up to 2 500m²) 5.2% Hypermarket 7.5% Other 6.8% From these figures it is possible to deduce the total motorised travel for the

11 purpose of purchasing (2 325 million km for customers travelling by car), and thus the total impact in terms of emissions and total contamination generated by the commercial sector in Spain ( mt of NOx emissions [greenhouse gases] and mt OF CO₂ emissions). Using these figures in conjunction with the previous information, emissions in 2007 can be broken down as follows: Hypermarket Supermarket (up to 2 500m²) Traditional shop Other MT CO₂ MT NOx MT CO₂ MT NOx MT CO₂ MT NOx MT CO₂ MT NOx Based on this example in Spain, which we consider to be the most complete of all the studies currently available, we can conclude that the issue of sustainability and mobility associated with food shopping should be integrated into the Commission's reflections referred to in this document. In our opinion, the study must involve an appropriate analysis of the future role to be played by local shops in the EU, linked to the first point of this document on town planning and ensuring consumer supply. Madrid, September 2010