The challenges facing the modern commerce sector in the CEE region Renata Juszkiewicz- Chairman of CEE Commerce Council President of Polish Organsation of Trade and Distribution. Brussels, 8 November 2011. C entral E astern E uropean C ommerce C ouncil.
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The challenges facing the modern commerce sector in the CEE regionRenata Juszkiewicz- Chairman of CEE Commerce CouncilPresident of Polish Organsation of Trade and Distribution
Brussels, 8November 2011
Representing commerce in 9 CEE countries:
Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Bulgaria, Estonia.
20 Oct. 2010 Common Communique
To voice common concern about restrictions impairing our industries and the national economies of CEE countries
To prevent the “spillover” effectof harmful laws and restrictive policies
To build a network to object to restrictive laws and polices in the region’s countries.
To carry out advocacy activities towards the EU institutions in particular the Commission and the Parliament.
Major impact on the transformation process in the CEE region
Groundbreaking impact on market economy
Modernisation of the sector
Country 1991 (%) IIQ2011(%)
Poland -7.0 4.3
Czech Rep. -11.5 2.2
Slovakia -14.6 3.3
Romania -12.9 0.3
Hungary -11.9 1.5
Bulgaria -11.7 2.0
Country 1991(%) 2011(%)
Poland 70.3 3.9
Czech Rep. 56.6 1.8
Slovakia 61.2 4.3
Romania 170.2 3.4
Hungary 35.0 3.6
Bulgaria 338.5 3.3
FI: 90 b EUR
Sales: 62 b EUR
New jobs: 390 000
New stores: 8 000
Made the region attractive to investors
Contributed to the growth of other sectors
Strengthened export market
Stimulated consumption and production
Breakthrough in food processing
Wide range of assortments
Different modern commerce formats
Fostering changes in consumer behaviour
Quality and standard inhancement
Restrictions breachthe EC Treaty:
Art. 49 Freedom of establishment
Art. 56 Freedom to provide services
Obstacles to the integrated internal European market.
Introducing discriminatory policies largely imposed upon big international retailers
Code of Conduct
Significant market power
Definition of significant market power
Payment terms for some products 30 days, fresh food 14 days
Ban on products audit
Ban on bonus and discount of the private labels
The liberty to terminate the purchase contracts 60 days in advance
Placing the purchasing conditions on www
Obligations for domestic products quotas
Mandatory reporting of food imports incl. EU products
Exclusive penalization of retailers for quality and safety standards
Act on unfair form in business relations between the buyer and supplier of goods consisting in food /Complaint - 15 May 2008
Abolition: 1 April 2011
Memorandum of Ethic in Food industry
Amendment to the law on foodstuff
Ban on unfair practices of distributors in relation to agriculture products and the food industry towards suppliers
Good Practices Code
Food Trade Law No.321- Oct. 2009
Amended in Dec. 2010
To show the products purchasing prices to the consumers
To report product prices in a Price Observer database on weekly basis
To allocate sale spaces to national products.
Draft law amending the Act on Protection of Competition
Competition Law of Latvia
Act on significant market power in the sale of agricultural and food products – lodged to the EC- no response!
A draft amendment to Act No. 143/2001 on the Protection of Economic Competition
A draft amendment to Act No. 526/1990 on Pricing
Act on Combating Unfair Competition
Unfavourable Resolutions of the Supreme Court of Poland/ influence guidance on legal consideration
Trade, Energy, Telecommunication
2.5% net annual sales
Claims to EU Commission: 17Nov. 2010
Art. 107 ‚Treaty on the Functioning of the EU’ (unlawful state aid)
Discrimination of foreign investors and Art. 401 EU- Guidelines 2006/112/EC
Amendment proposalin connection with Bill “on the Amendments of an Act Required for Enforcing the Consideration of Sustainability in the Operation of Commercial Centres”
Retailers are responsible for price increases, especially of food products
Retailers restrict the access of national small and medium producers/suppliers in the stores, through slotting allowances
Retailers favor imports
Retailers make huge profits while the national producers are almost driven to bankruptcy
Retailers’ in-city presence affects traffic and kills small corner-stores
Retailers are a part of cartel arrangements and operate on a monopolistic basis
The governmental initiatives based on protectionism
Short term thinking which inhibits growth of national economies.
Limit and prevent the capacity for certain forms of business models.
The governments try to shift the burden for agriculture to the commerce sector!
Increase in consumer prices
Increase in inflation
Increase in cheap imported products
Decrease in domestic production
Reduced product quality
Barriers for establishment of new stores
Damage of the positive image of our countries within investor community
Weakening of GDP economies based on internal market
The achievment of recent decades will wither
Does anybody benefit from that?
European Parliament, the European Commission, member state governments
To closely examine the developments in the commerce sector in allthe countries of our region.
To consider what action should be taken to improve the current situation.
To create effective EU-policy for further development of the CEE region.