Anyone who lives on the border with Germany knows all about it: groceries from our eastern neighbors are often considerably cheaper. New research shows that Dutch retailers and supermarkets are sometimes prevented from making cheaper purchases across the border. This could lead to higher consumer prices on our Dutch shelves.
Retailers and supermarkets have been complaining about this phenomenon for some time. Research by Ecorys, commissioned by the Ministry of Economic Affairs, confirms the existence of purchasing barriers.
The bottom line is that manufacturers impose restrictions on distributors and retailers. As a result, stores cannot always make purchases where prices are the most favorable. Sometimes they are not allowed to purchase certain items, which means that our offering is more limited. These types of restrictions are bad for the margins of the supermarket or retailer, but can also lead to higher consumer prices.
A-brands
The retail industry indicates in the study that restrictions are a problem for up to 1 in 25 purchased products. For this category, this can lead to a purchasing price that is on average 10 percent higher. This mainly concerns A-brands.
However, price differences with our neighboring countries are not always due to purchasing barriers. For example, VAT on food in Germany is lower than in our country. Sometimes it is not the producer, but the supermarket: for example, the researchers discovered that a jar of HAK applesauce at Albert Heijn costs 1.79 euros in the Netherlands and only 0.99 euros in Belgium. HAK states that it is not due to the purchasing price, the researchers conclude that HAK can charge more here due to greater brand awareness in the Netherlands.
But that does not alter the fact that large supermarkets such as Albert Heijn and Jumbo indicate to the researchers that purchasing restrictions are a problem. Research into specific products has also been conducted in Austria. For example, Spar Austria had to sell the product L’Oréal Excellence Hair in Austria for a price around 7.99 euros, while in Germany it is available for around 2.99 euros.
Discriminate
Unfair trading practices in the European internal market are prohibited, but the researchers indicate that this phenomenon is difficult to tackle legally. Outgoing Minister Micky Adriaansens (Economic Affairs) therefore sees adjusting European rules as one of the possible solutions.
However, Brussels is usually not the fastest route to tackle problems. That is why the VVD minister suggests to see whether a legal ban can first be introduced within the Benelux. This would mean that manufacturers and suppliers within shops and supermarkets from Belgium, the Netherlands and Luxembourg are no longer allowed to discriminate based on location.
Digital labels
That won’t be easy. Because anyone who purchases abroad must provide us with product packaging in Dutch. According to Adriaansens, this could perhaps be solved with digital labels on products. Consumers can then select their own language. This also poses a problem: not everyone can handle QR codes and consumers must have a smartphone.
Nevertheless, the minister has put the subject on the European agenda together with her colleagues from Belgium and Luxembourg. “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,” says Adriaansens.