08 July 2013

The NFDA’s submission to the EC’s green paper on unfair trading practices makes for fascinating reading. And there are a number of interesting areas that stand out.

First up is the way the green paper came to light. Last year the EC thought it would look at the food and grocery market but allowed other industries to respond. This is what highlighted the problem in the automotive sector. Despite it being mainly a look at the supermarkets and how they deal with their suppliers more than a third of the responses were from car retailers.

Next is the fact it highlights the lack of dialogue from car manufacturers over the possibility of self-regulation, in other words the adoption of a code of practice. OEMs haven’t responded to possible ideas for codes of conduct from the trade bodies representing retailers or suggested their own code.

The result is that the NFDA is forced to back a legislative approach.

This in itself is interesting because of the recent dilution of the Block Exemption Regulations. These, however, come out of the Competition Commission division of the EC, whereas the green paper on unfair trading practices comes from the DG Internal Market and Services department. This gives the NFDA a second go at getting a better deal for retailers.

If the DG Internal Market sees enough evidence following the green paper, then it could produce a white paper recommending legislation.

While in a lot of cases legislation can lead to red tape and additional business costs, in this it is the only solution to get a level playing field between retailer and manufacturer.

Tristan Young
Editorial Director
Auto Retail Network

Tags: EC, legislation, NFDA, unfair trading, unfair trading practices, UTP