16 SEPTEMBER 2018
Update from our Nordic Fair Trading Conference
Under the label ”fairness for all” suppliers and other stakeholders such as lawyers and political representatives from Norway, Sweden, Finland and Denmark gathered at a conference this Thursday organized by The Nordic grocery associations to discuss the issues of unfair trading practise mainly between suppliers and retailers. Inspirations from the UK-model and the proposed EU-directive were some of the headlines of the day.
While many markets in Europe already address unfair trading practise with legal regulations or voluntary code of practise, the Nordic market is still very liberal on the subject even though surveys show the problem is huge. A proposed EU-directive could change that.
The conference started with a short introduction to changes in the new retail landscape from Bain and Company and the findings from a survey from Copenhagen Business School on retailers as customers and competitors, which showed the extent of the issue.
UK-model is a success
Christine Tacon, UK Groceries Code Adjudicator, inspired the attendees with the UK-model called GSCOP. It changed the UK trading environment with legal regulations and her as the third part to check up on it. Her job is to find the issues as they happen and if necessary she has the right to investigate but mostly the issue is taken care of before it ends there.
Christine Tacon shared her experiences on how she insisted on knowing all the suppliers and how she came to meet them asking all kinds of questions. Aware that if she didn’t they wouldn’t tell her anything, due to the risk of losing customers. That’s why she has stepped up to 30 suppliers and trade events, had 61 meetings with the suppliers one to one and conducted 9 surveys. She explains that most often it is the big companies who dare to speak up and raise a breach of the code but for the benefit of all sizes of suppliers. This supports a principal of fairness for all regardless of size.
She explains: “Nothing hits my desk, I have to find it”. She explained the most important tool is the collaborated approach. She would never start to investigate without making sure they had the chance to change. They always get a notice which often results in no investigation needed. The result is, that the suppliers now tell her, that they have nothing to report, “but please don’t go away”. She encourages everyone to know the code, get them self-trained and speak up. Afterwards the British Brands Group talked about successful implementation of GSCOP with focus on awareness and training of the code. The managing director from Arla Foods UK gave the manufacture perspective on GSCOP impact on the UK trading environment.
EU-directive in details
Michelle Gibbons, director general in AIM, introduced the attendees to the proposed EU-directive, the political process, and thoughts on how it will impact the markets in the different countries. She explained that the issue has been discussed for many years on a EU-level and different kinds of discussions led to the final proposal in April.
According to the initial proposal, it will only be the SME (small medium-sized enterprises) who will be covered by the law, just as it only will be food and perishable food products which will be covered. It is currently being addressed by AIM and several other stakeholders that the directive must cover all – regardless of size.
For instance some of the issues discussed are that you cannot pay for perishable foods later than 30 days after invoice is received, you are not allowed to cancel orders on short notice if alternatives can’t be found, and you will not be able to return unsold food products to the supplier.
At the moment 28 member states in the parliament are working on finding an agreement.
Because of the election between 23-26 of May 2019, it makes a timeframe, which makes sure there will be a decision before the end of the year or at latest February/March. This is also why the proposal is cut down to the minimum. But there is a lot of political will and strong pressure.
In the end of the conference the four Nordic countries all came with an update on current initiatives on unfair trading practise which involves working groups, a wish for fairness regardless of size of business and category, and clearly being inspired from the UK-model GSCOP. Furthermore, each country shared their perspective on the proposed EU-directive.