Europe wants to tackle territo­rial supply constraints

Sourcing from the Member State offering the best terms seems logical. Yet retailers and wholesalers face territorial supply constraints. Suppliers can restrict product sales to specific countries. Packaging variations can also impede cross-border trade. This fragments the European market and may contribute to higher prices. Six competition authorities therefore want Europe to take action.

Smaller markets under pressure

The competition authorities of the Netherlands, Austria, Belgium, Greece, Portugal, and the Czech Republic jointly sent a letter to the European Commission. They are calling for targeted legislation against unjustified restrictions.

According to the letter, smaller European markets are particularly affected. Retailers and wholesalers in these markets generally purchase smaller volumes. This may weaken their bargaining position with manufacturers.

A 2020 European study calculated the potential impact on prices. Without these restrictions, retailers could pay an average of 8.8% less for their purchases. Consumer prices could be 7.6% lower on average. Total savings were estimated at €14.1 billion.

Current rules do not cover everything

EU competition law does not always provide a solution. It applies, for example, when a dominant company abuses its market position. Prohibited agreements between companies are also covered by these rules.

However, many restrictions are imposed unilaterally by companies without a dominant market position. As a result, they fall outside existing competition rules. The European Geo-blocking Regulation only applies to consumer sales. Business-to-business transactions are not covered.

AB InBev was fined €200 million in 2019. Among other practices, the brewer restricted supplies to Dutch wholesalers. Mondelez was fined €337.5 million in 2024. The company imposed territorial restrictions on wholesalers and retailers.

Digital labeling pilot

DG GROW is working on a digital labeling pilot for food products. The initiative focuses on differences between national packaging. According to the letter, European food labeling rules are already largely harmonized.

The European Commission aims to develop new instruments by the end of 2026. These would also allow it to address restrictions that fall outside competition law.

Acm.nl