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Operational Restrictions in the Retail Sector

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Operational Restrictions in the Retail Sector Operational restrictions in the retail sector Written by LE Europe, Spark Legal Network and Consultancy and VVA Consulting November – 2017 EUROPEAN COMMISSION Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs Directorate E — Modernisation of the Single Market Unit Directorate E.4 — Business to Business Services Contact: Maciej GORKA E-mail: [email protected] [email protected] European Commission B-1049 Brussels EUROPEAN COMMISSION Operational restrictions in the retail sector Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs 2017 Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): 00 800 6 7 8 9 10 11 (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). LEGAL NOTICE This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. More information on the European Union is available on the Internet (http://www.europa.eu). Luxembourg: Publications Office of the European Union, 2017 ISBN number 978-92-79-73246-1 doi:number 10.2873/6677 © European Union, 2017 Reproduction is authorised provided the source is acknowledged. Printed in Belgium Image(s) © artist's name + image #, Year. Source: Fotolia.com (unless otherwise specified) EUROPEAN COMMISSION LE Europe , Spark Legal and VVA i Executive Summary Contents EXECUTIVE SUMMARY .................................................................................................. IV 1 INTRODUCTION ..................................................................................................... 1 2 IDENTIFICATION, MAPPING, AND DESCRIBING OPERATIONAL RESTRICTIONS IN THE RETAIL SECTOR - OBJECTIVES, SCOPE AND METHODOLOGY ................................ 3 3 IDENTIFICATION AND MAPPING OF OPERATIONAL RESTRICTIONS IN THE 28 MEMBER STATES AND NORWAY ............................................................................... 9 3.1 Introduction ................................................................................................. 9 3.2 Overview of operational restrictions identified across the EU............................. 10 3.3 Restrictions on sales activities ...................................................................... 11 3.3.1 Introduction .................................................................................. 11 3.3.2 Restrictions on shop opening hours .................................................. 12 3.3.3 Restrictions on distribution channels (Alcohol) ................................... 22 3.3.4 Restrictions on distribution channels (Medicines) ................................ 27 3.3.5 Restrictions on distribution channels (Tobacco) .................................. 38 3.3.6 Other restrictions on sales activities ................................................. 42 3.4 Restrictions on promotional activities ............................................................. 48 3.4.1 Restrictions for end-of-season sales ...................................................... 49 3.4.2 Restrictions on end-of-business sales .................................................... 55 3.4.3 Restrictions on discounted sales ........................................................... 62 3.4.4 Restrictions on sales below cost ....................................................... 66 3.4.5 Promotional activities (other) .......................................................... 70 3.5 Restrictions on sourcing ............................................................................... 74 3.5.1 Direct sourcing restrictions .............................................................. 75 3.5.2 Indirect sourcing restrictions: origin labelling ..................................... 77 3.6 Financial restrictions .................................................................................... 78 3.7 Key findings and conclusions ........................................................................ 83 4 IDENTIFICATION BY THE RETAIL SECTOR OF THE MOST BURDENSOME RESTRICTIONS .................................................................................................... 87 4.1 Introduction ............................................................................................... 87 4.2 Ranking of the 10 most problematic operational restrictions faced by retailers ..................................................................................................... 87 4.2.1 Operational restrictions in the EU-28 and Norway .............................. 89 4.2.2 Operational restrictions by retailers’ size ........................................... 92 4.2.3 Operational restrictions by retailing sector (food/non-food) ................. 93 4.2.4 Operational restrictions by retail channel (brick and mortar/online) ...... 95 4.3 Key findings and conclusions ........................................................................ 97 5 METHODOLOGY FOR MEASURING THE BURDEN OF COMPLYING WITH OPERATIONAL RESTRICTIONS ............................................................................... 98 5.1 Introduction ............................................................................................... 98 5.2 Main findings from the literature ................................................................... 98 5.3 Conceptual framework for the analysis of the impacts of operational restrictions ............................................................................................... 101 5.3.1 Cost categories in the analytical framework ..................................... 103 5.4 Survey methodology ................................................................................. 106 5.4.1 Questionnaire structure ................................................................ 106 5.4.2 Questions to online retailers .......................................................... 107 5.4.3 Sampling methodology ................................................................. 107 LE Europe, Spark Legal and VVA ii EUROPEAN COMMISSION 6 SURVEY RESULTS AND QUANTIFICATION OF THE BURDEN OF OPERATIONAL RESTRICTIONS IN THE RETAIL SECTOR IN THE EU28 AND NORWAY ........................ 110 6.1 Retailers’ views and opinions on general statements about legislation in the EU .......................................................................................................... 110 6.2 Views on the burdens imposed by different compliance tasks ......................... 119 6.3 Impact of retail restrictions on operational aspects of businesses .................... 120 6.3.1 Impact on businesses of sales and promotions restrictions ................ 120 6.3.2 Impact on businesses of opening hours restrictions .......................... 124 6.3.3 Impact on businesses of restrictions on selling ................................. 127 6.3.4 Impact on businesses of restrictions on sourcing .............................. 129 6.3.5 Rating of burdens from additional restrictions .................................. 131 6.4 Assessment of regulatory burdens by online retailers .................................... 138 6.5 Enforcement ............................................................................................. 148 6.6 Estimate of the monetary value of the burdens ............................................. 155 ANNEX 1 REVIEW OF THE LITERATURE ON MEASURING BURDEN OF RESTRICTIONS ...... 169 A1.1 Frameworks for analysing the burden of regulation ....................................... 169 A1.2 Methods for quantifying regulation costs faced by businesses ......................... 175 A1.3 Public sector studies of the overall burden of regulation ................................. 182 A1.4 Cost of regulation: implementation through business surveys ......................... 188 A1.5 Examples of studies using the above methods .............................................. 189 A1.6 Competition impacts of regulation ............................................................... 192 A1.7 Cost of regulation: methods for quantifying wider economic impacts ............... 193 A1.8 Literature on retail sector impacts of regulation ............................................ 196 A1.9 Broad measure of regulation impacting the retail sector ................................. 201 A1.9.1 The OECD’s index of retail sector regulation .................................... 201 A1.9.2 World Economic Forum cost of business indicators ........................... 203 A1.10 Conclusions from the literature review ......................................................... 204 A1.11 Review of literature references ................................................................... 205 ANNEX 2 ADDITIONAL INFORMATION ON SURVEY RESPONSE SAMPLE ......................... 211 LE Europe , Spark Legal and VVA iii Executive Summary Executive Summary The Single Market Strategy (SMS) adopted in October 20151 proposes actions addressing remaining obstacles to a better functioning internal market in services, including retail services. In particular, for the retail sector, it proposes that “the Commission will set out best practices for facilitating retail establishment and reducing operational restrictions in the Single Market. These will provide guidance for Member State reforms and priority-setting for enforcement policy in the retail sector”. The present
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