“An effective framework for independent retail” – stronger together“

Whilst we acknowledge that change processes are necessary, the force with which they are being driven forward inside the European Union has a range of impacts for the REWE Group. These are felt by the REWE Group itself, which represents 380,000 employees in 21 countries on the one hand. And on the other hand, REWE as a whole, the REWE Group’s Public Affairs team and the Retailers division are particularly focused on the interests of the 1,800 independent REWE retailers. Due to the owner-operated model, some of the regulations that have been adopted or are currently pending will or may have a significant effect on these retailers. All these interests must be represented at the political level in Berlin and Brussels, in the German federal states and at the regional level. This is crucial for our customers and our employees, as well as for the independent REWE retailers to whom we, as a cooperative, have a particular duty.

To ensure that cooperatives in the mid-market sector can thrive, it remains imperative, even at EU level, that companies form associations and work together to mutually strengthen their position because, truth be told, Brussels is a place where individual companies struggle to make their voices heard.

I am therefore delighted that Independent Retail Europe (IRE) is celebrating its 60th anniversary at this time. The association, of which I have been president since 2019, has been championing the interests of cooperative business models for six decades. IRE speaks on behalf of 23 independent retail associations across Europe, currently representing almost 462,000 independent retailers and 6.5 million employees. These impressive figures demonstrate the huge importance of independent retail, both food and non-food, in Europe.

It is my belief that the strong influence of Brussels on national legislation makes it essential to participate actively in associations, seek practical input from companies, collaborate on positions and engage in policy discussions. Independent Retail Europe puts the share of national retail legislation based on EU law at 65 percent.

Let us consider the issue of reporting. We do not call into question the fundamental rationale behind the regulations, such as the EU regulation for deforestation-free supply chains, the Corporate Sustainability Reporting Directive or the EU Supply Chain Act. However, we do not believe that the principle of ‘one size fits all’ works for every business model across the board. For instance, the sustainability report produced by a corporate group will be much more meaningful than a report from a single general partnership, such as an independent retailer with one or more stores. And this creates a huge administrative burden for our retailers. To be frank, there is often a lack of proportion when it comes to issues such as these. It is therefore important to campaign for an effective framework for independent retail.

In recent times, no EU regulation has made this more obvious than the directive on Unfair Trading Practices (UTP). The directive focused on the prohibition of unfair trading practices and therefore had the fundamentally good intention of empowering smaller suppliers. However, during the political process, discussions were not confined to the extent to which international mega-corporations need protecting. The spotlight also fell on the cooperative business model which came under considerable fire. Unfortunately, this means that limitations have also been placed on the scope for commercial freedom in the collaborative partnerships between local suppliers and independent retailers at the store level – to the detriment of both REWE and smaller retailers.

The REWE Group and IRE are currently grappling with the Late Payment Directive, which aims to limit payment terms in business transactions. Under this directive, payments should be made no later than 30 calendar days after receipt of an invoice or an equivalent payment request. We are not alone in our criticism of this blanket approach. The German Confederation of Skilled Crafts and the Raiffeisen Association have also voiced their concerns. The draft legislation was designed to improve company liquidity. However, the current version falls short of this aim and, in our view, is more likely to have the opposite effect.

Throughout Europe, cooperative business models stand for sustainability and innovation, intergenerational commercial livelihoods and long-term retail strategies. Being an independent, REWE-affiliated retailer means enjoying a profitable combination of greater flexibility and individualisation, communication and integration. I am particularly keen to ensure that this business model remains competitive in the future. I also believe that greater political consideration should be given to the views of companies in the mid-market sector. After all, these companies form the backbone of the economy. Of course, this goes hand in hand with bolstering the organisations that enable independent retail to thrive, just as we do at REWE. I am keen to be involved in these discussions, as a spokesperson for REWE and for Independent Retail Europe.

Effective lobbying requires the active engagement of a broad base of companies. Therefore, on the occasion of Independent Retail Europe’s 60th anniversary, it is my wish that increasing numbers of companies will recognise how meaningful and necessary this work is and will get involved – in keeping with IRE’s mission statement, ‘stronger together’.