by Christian Prigent. Our price: $ Unavailable Les Coulisses De La Grande Distribution (French Edition). by Christian Jacquiau. Our price: $ Jacquiau, Christian, Les coulisses de la grande distribution, Albin Michel, Jetin, Bruno and Yannick Lung, ‘Un ré-examen de la relation entre variété et. Les Coulisses de la grande distribution (Documents Societe t. ) (French Edition. Les Coulisses de la grande distribution Christian Jacquiau.
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OJ C9. The current state of commercial relations between food suppliers and the large retail sector. The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 9 January At its th plenary session, held on 13 and 14 February meeting of 13 Februarythe European Economic and Social Committee adopted the following opinion by 79 votes to 6 with 2 abstentions.
The EESC notes that large retailers constitute an oligopoly in every country. According to statistics cistribution market share, a handful of retailers control most of cooulisses market everywhere. The EESC believes that this oligopolistic position gives its member companies an enormous amount of bargaining power over their suppliers. As a result, they are able to impose trading terms on their suppliers which are far from balanced. The EESC points out that the companies that form this oligopoly are only in competition with one another in relation to their customers.
They compete with one another to win over new customers yet competition with regard to their suppliers is scarcely apparent. The EESC notes that there is much obscurity regarding price formation and the profit margins of the various market players. The supplier rebates used by the large retail sector mean that the purchase price paid to suppliers does not reflect the actual revenues they receive for their products.
The EESC is convinced that if a contractual jacquiaau can impose its own terms on its business partners there is no contractual freedom. The abusive and anti-competition practices which large retailers apply towards their food suppliers demonstrate a lack of any real contractual freedom. Abusive practices inflict damage not only on producers but on consumers too especially over the long term. The extent of abusive practice is currently such that it is damaging to the public interest in general and to the economic interests of the Member States in particular.
According to the EESC, particularly worrying abusive practices only occur in relations between large retailers and their food suppliers. They are not applied by the food industry towards farmers or by the large retail sector towards suppliers of non-food products.
The EESC notes that the efforts of farmers and processing companies in certain Member States to set up groups of producers have been penalised by national competition authorities who have assessed the importance of these groups based on national production alone.
The EESC notes the failure of the market as the situation continues to deteriorate in a couilsses that is insufficiently regulated. In the EESC’s opinion, self-regulation does not provide a sufficient antidote to the distortions observed. The very nature of such abusive practices both requires and justifies a law to prohibit them.
The EESC calls on the European Commission to begin addressing the issue of oligopolies, to examine their real power and influence, identify to what extent their impact is comparable to that of monopolies and, consequently, modify the principles underlying the rules on competition appropriately.
The EESC calls coulixses the European Chrjstian to join in recognising the lack of contractual freedom in relations between the large retail sector and food suppliers. This would make it possible to see how much hcristian actually receive for their products.
The EESC calls on the European Commission to provide national competition authorities with clear instructions to ensure that they take full account of the relevant market when assessing the negotiating power of groups of producers. Couliwses should cover all food products from the same category which are available on the market of the country in question not only those food products that are manufactured in the given Member State.
The EESC urges the European Commission to abandon the principle of self-regulation and to propose a binding legal text to improve the situation in the agro-food led by encouraging undistorted competition.
The concept of regulation should not be based on the protection of competition but should allow the State whose economic interest is at stake to intervene as a plaintiff during administrative and legal proceedings. Lastly, the EESC believes that there is a need to legislate towards a societal choice that looks beyond market forces, in order to curb the tendency for concentration within an increasingly powerful large retail sector and promote other forms of commerce djstribution as small independent shops, local markets and direct sales from producer to consumer.
In this context, the EESC calls on the Commission to place grandf particular emphasis on shorter supply chains in the documents under preparation on the fight against food waste. The commercial relations between large retailers and the suppliers of food products is a subject that is generating an increasing amount of interest not to mention concern.
In general, the large retail sector was considered to provide a useful public service that benefited everybody and whose development was a measure of a country’s economic health. The authorities and the media drew attention mainly to its unquestionable jacquiiau, especially the fact that it allowed consumers to buy practically everything under one roof — and at competitive prices to boot — and to the distrubution available e.
The situation has changed dramatically over the last five years or so and the European institutions have published numerous documents criticising this state of affairs. The large retail sector began rapidly developing some 30 years ago and this evolution has been closely linked to the globalisation process. Indeed, the distirbution majority of the large retailers that currently control the retail market are multinational corporations.
They are much better placed than SMEs to reap the benefits of the conditions afforded by globalisation.
EUR-Lex Access to European Union law
The rapid growth of multinationals including large retailers often takes place at the expense of SMEs. In many sectors, the lion’s share of any given market is controlled by just a handful of large multinational firms.
Europe’s large retail companies are actively involved in conquering the global market. The result of all this is that a handful of large retail companies have firm control over the retail food markets in a variety of countries.
This reflects the fact that while no single retailer may officially be defined as having a dominant position, the lion’s share of the market is controlled by three to five companies that represent an oligopoly. There is no doubt that the members of these oligopolies compete with one another but only over their customers.
Competition with regard to suppliers is scarcely apparent, especially where SMEs are concerned. Unlike their suppliers, who are far greater in number, the buyers retailers are spoiled for choice.
Nonetheless, while producers are right to expect a faire share of the sales margin as part of a loyal and healthy commercial relationship with their distributors they must also be attentive to the signals they receive from them about the requirements of consumers.
Producers who are able to innovate and adapt the preparation and presentation of their products to meet demand will have greater bargaining power. Thanks to their buyer power, large retailers are therefore able to impose their own terms, which are such that they often represent an abuse of buyer power. As well as generating constant downward pressure on retail prices, late payments or excessively long payment deadlines, the use of such abusive practices by large multiples has completely changed the classic model of cooperation between suppliers and buyers.
In simple terms, traditionally, the parties involved agreed on the volume and price of the goods to be delivered, and on other necessary terms and conditions, after which the supplier delivered the goods which were then paid for by the buyer.
This model has been turned completely upside down with the advent of the large retailers. Today, suppliers — who receive less and less money for their products — are forced to pay more and more or to agree to other forms of compensation in return for access to the buyer’s services. This means that those who should be receiving money are actually receiving invoices instead.
It is worth noting that the large retailers have successfully managed to impose this new model; it is now generally accepted and something that surprises nobody, least of all the competent authorities. The first involves the transfer — from the buyer to the supplier — of commercial costs, namely: Retailers achieve this by imposing a variety of different payments on their suppliers such as listing fees or by charging for promotional leaflets.
The second form of abusive practice involves large retailers passing on the cost of their business risk to their suppliers, which in practice means making retrospective changes to the agreed price based on how well the product in question sold to the customer.
In this way, any differences compared with sales forecasts are borne by the supplier. This second objective is achieved thanks to a complicated system for establishing the final net price various types of return bonus. These two mechanisms distort the simple business formula by which production costs are borne by the producer while the commercial costs are borne by the seller.
This new model for retailer-supplier relations was introduced on the pretext that there was a need for closer commercial cooperation in view of the increasingly tough competition in the retail sector.
The large multiples’ reasoning is as follows: Although this is by no means a vision that is shared by everybody, the suppliers are forced to accept these terms. However, the large retailers do not stop there and this form of wider commercial cooperation is subject to even more shocking forms of abuses. Either suppliers are overtly overcharged for services actually provided or the buyers invoice their suppliers for services that are purely fictitious.
Incredible though it may sound, retailing multiples are known to have issued their food suppliers with invoices containing all of these headings and more. Neither suppliers nor external observers are capable of identifying the actual purchase price.
A more transparent system should be imposed. The suppliers accept this particularly harmful system because they have no other choice. They cannot bypass the large retail sector if they wish to sell their products and, for this very reason, they continue to sign sales contracts so long as such cooperation provides at least a minimal profit margin.
In reality, the abusive practices employed by the various large multiple retailers are practically identical; it is therefore impossible to determine whether it is more profitable to cooperate with one supermarket chain over another. The use of abusive contractual conditions is generally considered to be unethical.
However, in the light of the practices outlined above, this term is clearly inadequate. In cases where the terms of business are dictated by one party that is strong and another that is unable to refuse them in practice, it is more appropriate to use the terms blackmail or extortion instead.
Furthermore, given these circumstances it is also inappropriate to talk about contractual freedom, a concept that the retailers and competent authorities refer to so readily. Just as contractual freedom cannot be assumed to exist in relations between natural monopolies electricity or gas suppliers and the final customers, it would be equally misleading to describe the relations between the large retail sector and food suppliers in this manner.
The use of abusive practices by large retailers is not only damaging for suppliers but for consumers as well. It can often put suppliers, especially small and medium-sized producers, in very difficult situations financially, which can lead to companies closing, something which occurs from time to time. The large food companies usually cope much better with this situation as they can offset the lower revenue on their products by delivering in huge volumes.
Furthermore, these multinational food companies also enjoy substantial negotiating power: For consumers — the main beneficiaries of the system according to the authorities — the reality is much less rosy than we are made to believe. Several factors suggest that the use of abusive practices towards suppliers can also have a negative impact on consumers. Large retailers have also had quite an important social impact, as the way in which they operate has shattered a number of taboos.
For example, Sundays are no longer as sacred as they once were, as hypermarkets and supermarkets are now open seven days a week or even 24 hours a day, with all the effects on working conditions that this entails.
Coulisse in Bulgarian, translation, English-Bulgarian Dictionary
The phenomenon of large retailers affects many other suppliers outside the food sector. Nonetheless, it is primarily food producers who are the victims of abusive practices.
There are undoubtedly many reasons for this. One is certainly the fact that there is a wider range of outlets for manufacturers of non-food products. Alongside large retail stores, producers of clothing, household appliances, books or sports equipment are all catered to by chains of specialist shops. There is therefore good reason to focus specifically on relations between large multiple retailers and food suppliers.
While price negotiations can often be very tough, food companies do not usually ask their suppliers to contribute for instance to the purchase of a new bottling line, unlike large retailers, who systematically demand that their suppliers make payments relating to the modernisation of their stores or the opening of new ones. In short, most of the above abusive practices exist only in relations between supermarkets and food suppliers. However, given the impact of these practices and the extent to which they are being applied, they are also creating a third victim: The inability of certain suppliers to meet the requirements of large retailers and the resulting economic difficulties are contributing to the decline of the agro-food sector in several countries.
Certain Member States, which were once self-sufficient in terms of foodstuffs, have lost their food security in this manner, which represents a particularly dangerous situation today. For some time now, the abusive practices employed by large retailers towards their suppliers have received an increasing amount of criticism from the authorities of both individual Member States and the EU institutions.
The European Competition Network ECNwhich groups together the European Commission and the national competition authorities of the 27 Member States, published a report which follows up the Commission’s Communication on A better functioning food supply chain in Europe.
The communication called for a common approach among competition authorities within the European Competition Network to improve the detection of endemic problems specific to food markets and to swiftly coordinate future action.