European Property Federation

EPF logo

<RETAIL SERVICES: Commission Communication & Retail Restrictiveness Indicator

Extracts from Secretariat report to the Managing Committee:

...

The Commission Communication "A retail sector fit for the 21st century" and Annex with retail establishment and operations restrictions rankings issued on 19 April confirms this excellent approach. There is no attempt to regulate retail real estate, and the attitude is exemplary! The ideology has changed 180°! Restrictions on retail development and operation are generally viewed as a mistake, one of the reasons why prices are high and retail sector productivity low and a gift to on-line commerce (1).

(1) The Commission is not 'for' brick-and-mortar and 'against' on-line commerce, but it doesn't see why tax policies should favour one over the other. It notes the shift in tax structure all over Europe from corporation tax to property tax such as business rates and sees that on-line commerce gets off free.

But the Commission is not setting out to liberalise via regulation. The Communication contains only guidelines and best practice. Concerning tougher action, there is a simple mantra: It will be case-by-case:

"The task of regulating the retail sector lies primarily with Member States. However, when they set rules, Member States need to comply with EU law and not unduly restrict the freedom of establishment or the free provision of services. As a result, some restrictions are prohibited, whereas in other cases they may be maintained or introduced as long as they are non-discriminatory, justified on the ground of legitimate public policy objectives and proportionate." (Communication, p. 5, par. 2)

...

There is much fine analysis that can be used to support any future approach to the Commission. In the meantime, it's best to ensure that there is nothing misleading and potentially counterproductive. In particular, members should look at the Retail Restrictiveness Indicator in the Annex to the Communication and in the CSWD on pp. 14-16, 37-38, 100-101, 107-122. Member states that have a low RRI are less likely to get Commission attention or prioritisation. Therefore, it is best to check whether the RRI and its scoring method are working properly for your country. If there are problems or questions, we should raise them with the Commission. To do this, you need to understand the RRI scoring methods explained on pp. 107-119 CSWD.

...

Full report under epf18-27 of 26.04.2018