Green Paper on Unfair Trading Practices (UTPs) in the business-to-business food and non food supply chain in Europe

Transcription

1 Brussels, 30 th April 2013 Green Paper on Unfair Trading Practices (UTPs) in the business-to-business food and non food supply chain in Europe Contribution of FIGIEFA (European Federation of Automotive Aftermarket Distributors) FIGIEFA is the International federation and political representative of independent wholesalers and retailers of automotive replacement parts and their associated repair chains in Brussels. FIGIEFA aims at maintaining effective competition in the automotive aftermarket and defending motorist consumers right to have their vehicles serviced, maintained and repaired at a workshop and with the replacement parts of their choice. FIGIEFA welcomes the Green Paper on Unfair Trading Practices (UTPs) drafted by the European Commission, as it touches a very sensitive issue affecting several business sectors, amongst others the independent distribution of automotive replacement parts and components. This is why FIGIEFA is pleased to provide its contribution by answering the questions outlined in the Green Paper and to highlight the main concerns for our sector deriving from UTPs. Although there is some pertinent legislation in the automotive aftermarket sector, there are several instances of UTPs. Please find below FIGIEFA s input: 1) Do you agree with the above definition of UPTs? Yes, we agree with the definition and we particularly welcome the wide scope of the Green Paper, which does not limit to the food sector only, but acknowledges the existence of UTPs in the non food supply chain as well. 2) Is the concept of UTPs recognised in your Member State? If yes, please explain. Not applicable, FIGIEFA is a European federation. 3) In your view, should the concept of UTPs be limited to contractual negotiations or should they include the pre- and /or the post contractual phase as well? FIGIEFA believes the concept of UTPs should be extended to cover all three phases. FIGIEFA International Federation of Automotive Aftermarket Distributors Boulevard de la Woluwe 42 Box 5 BE-1200 Brussels Tel.: Fax: figiefa@figiefa.eu Web: Bank: IBAN: BE BIC: BBRUBEBB V.A.T.: BE

2 4) At what stage in the B2B retail supply chain can UTPs occur? UTPs may occur at all stages of B2B retail supply. 5) What do you think of the concept of fear factor? Do you share the assessment made above on this issue? FIGIEFA shares the assessment made on the fear factor in the relationship between independent aftermarket operators and vehicle manufacturers for the supply of spare parts and of technical information, as it is often the reason for UTPs taking place. Moreover this factor is widespread also because of the limited economic resources that independent aftermarket companies possess, and of the enforcement mechanisms which are in practice unhandable for SMEs. As an example, the Aftermarket Block Exemption Regulation (EC) N 461/2010 require extensive legal and economic demonstration of market foreclosure (which is very burdensome and costly to demonstrate for SMEs), and the Euro 5 Regulation (EC) N 715/2007 shifts the enforcement on access to technical information for independent market operators to the national vehicle type approval authorities who generate most of the revenues from vehicle type approval with vehicle manufacturers and are therefore in a difficult situation when they have to judge complaints from independent operators about lack of access to technical information. This is an unsatisfactory situation, because it gives the signal to the dominant market player, the vehicle manufacturers, that enforcement of European legislation is not taking place, and it leaves room for generating UTPs. 6) In your experience, to what extent and how often do UTPs occur in the food sector? At which stage of the commercial relationship do they mainly occur and in what way? Mainly at the commercial relationships with vehicle manufacturers as dominant market players. 7) Are UTPs present in the non food retail sectors as well? If so, please provide concrete examples. Despite the fact that independent parts business selective distribution systems have been regulated since 1985 as the new cars sales by BERs (Block Exemption Regulation), with the effect of ending practically all selective distribution contracts existing till then, there are still some UTPs existing in our automotive aftermarket sector. This in fact happens on the issues of warranties, warning of security risks or access to technical information for the independent operators. To give some examples: - There are no exclusive distribution contracts anymore, but contracts with supply conditions (mainly discounts and bonuses) linked to sales figures. Since there is no regional protection on the sales sector, smaller distributors situated in more rural areas suffer from the competition of big, more than just regional and sometimes even national sales areas providing competitors with better purchase conditions. As a consequence smaller parts distributors sometimes lose their 2

3 possibility to purchase directly from the producer and may even end up being forced to purchase from their competitor, who will thus even strengthens his competitive position; - Parts manufacturers often tie wholesalers when choosing which parts to sell. In fact, there are distribution agreements that oblige a distributor willing to sell the most attractive parts of that producer to purchase his whole range of products. This is detrimental for weaker manufacturers, because by this kind of agreement, a strong manufacturer can exclude another one from the distribution network, even if the latter has a better range of certain products. Such distribution agreements therefore limit the possibility of parts distributors to freely choose the parts they would like to sell and cut off from the market a weaker manufacturer who may be specialised in a limited, although of better quality, range of parts. - Very often vehicle manufacturers refuse to deliver specific technical information to parts distributors, obliging them to rely on the solutions provided by the manufacturers instead of looking for alternative possibilities. - Vehicle manufacturers frequently impose warranty clauses prohibiting consumers to get their car serviced by the independent operators if they do not want to lose their warranty. This applies despite the repair work may not fall into the free services provided by the warranty contract. 8) Do UTPs have an adverse impact in particular as regards the ability of your company to invest and innovate? Please provide concrete examples and quantify to the extent possible. The above-mentioned phenomena are difficult to quantity, but they potentially deter consumers from choosing an independent service provider for the service, maintenance or repair of their vehicles and prevent independent operators from being able to deliver the same competitive service to consumers. 9) Do UTPs affect consumers (e.g. through influencing prices, product choice or innovation?) Please provide concrete examples and quantify to the extent possible. Yes, UTPs happening in the automotive aftermarket very much affect consumers, as for example in the case of warranty clauses. Such practices in fact limit the possibility for the consumer to choose where to service his car and impose anti-competitive prices which are a threat for the fair competition in the aftermarket. 3

4 10) Do UTPs have an impact on EU cross-border trade? Do UTPs result in a fragmentation of the Single Market? If yes, please explain to what extent UTPs impact the ability of your company to trade cross border. UTPs have an impact on EU cross-border trade since there are different national sales laws that may act as a barrier to cross-border trade. This situation could lead to a fragmentation of the Single Market and in order to avoid that, FIGIEFA supports the current proposal for a Common European Sales law. This piece of legislation should however be drafted in a way to ensure a balance between the parties and should take into account the needs of the SMEs. This is valid in particular for the prescription periods, for the claim for damages and to the rejection of goods. 11) Do the national/ self-regulatory frameworks in place sufficiently address UTPs in some Member States? If not, why? Despite the existence of efficient national frameworks in some Member States, this does not cover Europe as a whole. In order to fill this gap that leads to a fragmentation of legislations, it would be important to have legislation at European level and more appropriate and effective enforcement instruments handable for SMEs. 12) Is the lack of specific national/self regulatory frameworks addressing UTPs a problem in jurisdictions where they do not exist? Yes (please refer to question 11). 13) Do measures that seek to address UTPs have effects only on domestic markets or also on cross-border trade/provision of services? If so, please explain the impact on the ability of your company to do trade cross-border. Do the differences between national regulatory frameworks in place result in fragmentation of the Single Market? Please refer to question ) Do you consider further action should be taken at EU level? Yes, FIGIEFA believes that in order to properly prevent UTPs from happening, it is necessary to have legislation/regulations at European level, together with more appropriate and effective enforcement instruments handable for SMEs. In general, this is relevant for SMEs as they are very often the victims of UTPs. In particular, this is not good for the competitiveness of the automotive aftermarket, which mainly consists of SMEs whose competitiveness is at stake in these times of crisis. 4

5 15) Where it exists, does UTP regulation have a positive impact? Are there possible drawbacks/concerns linked to introducing UTP regulation, for example by imposing unjustified restrictions to contractual freedom? Please explain. The existence of anti-utp regulations at national level is positive and having a European Regulation on such issue would certainly be beneficial. However, in order to avoid drawbacks/concerns, it would be crucial to ensure that by introducing measures aiming at avoiding unjustified restrictions, the contractual freedom would not be negatively affected. A proper balance is required. 16) Are there significant discrepancies in the legal treatment of UTPs between Member States? If this is the case, are these discrepancies hindering cross-border trade? Please provide concrete examples and quantify the impact to the extent possible. Please refer to questions 10 and ) In case of such negative impacts to what extent should a common EU approach to enforcement address this issue? Due to the existing discrepancies that result in negative impacts for the cross-border trade, a common EU approach to enforcement would be the only solution. Such approach should not be done through soft law instruments, but possibly via European Regulations. 18) Should the relevant enforcement bodies be granted investigate powers, including the right to launch ex officio actions, impose sanctions and to accept anonymous complaints? Yes, FIGIEFA strongly believes that it would be appropriate, since the priority is to avoid UTPs, to adopt such measures and to empower enforcement bodies to do so. SMEs alone and on their own, as weaker parties, are not able to enforce complaints against UTP but shall be assisted by enforcement bodies with robust investigative power. 19) Does the above list detail the most significant UTPs? Are there other types of UTPs? It is difficult to categorize the whole types of UTPs; therefore the list cannot be exhaustive. For further types, please refer to question 7. 20) Could setting up a list of prohibited UTPs be an effective means to address the issue? Would such a list have to be regularly updated? Are there possible alternative solutions? Setting up a list that would aim at being as extensive as possible would be a good means to address the issue. However, such list would need to be frequently updated, as new UTPs may appear on the market. 5

6 21) For each of the UTPs and corresponding possible fair practices identified above, please: a) Indicate whether or not you agree with the analysis of the Commission. If applicable provide additional information. FIGIEFA agrees with the analysis of the Commission. b) Explain whether the UTP is relevant for the sector in which you are active. 5.1 yes; 5.2 no; 5.3 yes; 5.4 yes; 5.5 yes; 5.6 yes; 5.7 no. c) Explain if the corresponding possible fair practices could be applied across the board in different sectors. We think so. d) Explain if the UTP should be prohibited per se or if its assessment should be made on a case-by-case basis. UTPs being detrimental to a fair competition in the automotive aftermarket, it would be appropriate to prohibit them per se. 22) As regards specifically Territorial Supply Constraints, please explain: a) What would you consider to be objective efficiency grounds justifying a supplier not to supply a particular customer? Why? Not applicable. b) What would be the advantages and disadvantages of prohibiting territorial supply constraints (as described above)? What practical effects would such a prohibition have on how companies set up their distribution systems in Europe? Not applicable. 23) Should the above possible unfair practices be embodied in a framework at EU level? Would there be any disadvantages to such an approach? Yes, such types of practices should be embodied in a framework at EU level that should however be as extensive as possible in order to include all the different types. Additionally this list should be amendable on a regular basis in order to take into account possible new UTPs. 24) If you consider further action should be taken at EU level, should this be a binding legislative instrument? A non-binding? A self-regulatory initiative? From our negative experience with the abuse of a position of a dominant market player, soft-law instruments would not be appropriate to efficiently tackle the UTPs at EU level. More harmonization is needed and in order to ensure it would be implemented, binding legislation is required. 6

7 25) This Green Paper addresses UTPs and fairness of B2B relationships in the B2B food and non food supply chain. Do you think that any important issues have been omitted or under-represented in it? When categorizing the UTPs, it would be appropriate to introduce special provisions regarding the UTPs the automotive aftermarket has to face. Please refer to question 7. 7