News item | 27-11-2023 | 9:00 am
European manufacturers and suppliers prevent entrepreneurs such as shops from doing their shopping across the border. These so-called territorial supply restrictions (TLBs) also lead to higher consumer prices in the Netherlands, a lower profit margin for entrepreneurs and a more limited product range. This is evident from an independent study commissioned by the Ministry of Economic Affairs and Climate (EZK), which was sent to the House of Representatives by Minister Micky Adriaansens.
Possible solutions to this include an EU ban on these purchasing restrictions, possibly preceded by a legal ban in the Benelux countries. This concerns, for example, the introduction of a variant of the current EU Geo-blocking Regulation. This could then include a ban on ‘discrimination based on location’ in trade between companies.
Current EU language requirements for ‘physical’ labels may also mean that cheaper identical foreign products with a foreign label cannot be sold in the Netherlands. Therefore, in support of a possible TLB ban, it is also an option to look at the feasibility of digital labels on products that can be consulted in a consumer’s own language. After all, purchases are increasingly taking place online. The disadvantage of this is that not everyone is digitally skilled enough or has a smartphone.
Minister Micky Adriaansens (Economic Affairs and Climate): “The research confirms our suspicions that purchasing restrictions are a broader problem with negative consequences for both entrepreneurs and consumers. That is problematic, especially in times of high prices. Together with my Belgian and Luxembourg ministers, I have put the subject on the European agenda this autumn. And there are also signals about this problem from countries such as Austria and the Czech Republic.”
The minister continues: “It is now important to study the research results and develop options for an approach. However, possible solutions, such as a ban on ‘discrimination based on location’ in trade between companies, must be applicable and legally enforceable in all EU countries. From paper to practice is certainly not easy in this case, but we are motivated to take up this challenge with other countries and thus strengthen the EU internal market.”
Purchasing restrictions are widespread
According to retailers in the Ecorys study, which was commissioned by the Ministry of Economic Affairs and Climate Policy, purchasing restrictions affect up to 1 in 25 goods purchased by them (2-4%). For this group of products, this can lead to a purchasing price that is on average 10% higher. TLBs are widely available at DIY stores, supermarkets and online platforms, according to their professional buyers. The two largest Dutch supermarket chains, which together have a large majority of the market share, indicate that they are specifically confronted with purchasing restrictions.
Next steps
The research and the letter to Parliament can be read below. In addition to follow-up steps in Europe and the Benelux, the Minister of Economic Affairs and Climate Policy will also develop solutions in the Netherlands with other ministries, organizations and entrepreneurs.