This article is part of our special report Developing Single Market resilience.
While celebrating the 25th anniversary of the Single Market last year, the Commission called it ‘Europe’s best asset in a changing world’. But Single Market’s resilience to internal and external shocks still needs to be strengthened further.
In the European Council’s conclusions of 13-14 December 2018, the EU leaders acknowledged the European internal market as the bloc’s main asset for ensuring citizens’ welfare, inclusive growth and job creation, and as the essential driver of investment and global competitiveness.
The Single Market has upgraded the lives of citizens and businesses across Europe, creating one of the world’s largest economies and bringing economic benefits estimated to be worth the equivalent of 8.5% of EU GDP.
In spite all these achievements, the Commission Vice-President in charge of competitiveness, Jyrki Katainen, warned during the anniversary celebration at the Berlaymont that it is worth reminding the citizens again of how the Single Market improves our daily lives ahead of the crucial European elections
“There is the risk that today people take Single Market for granted. We actively discuss it within our members,” Hubert Weber, president of FoodDrinkEurope and president for Europe of Mondelēz International, told EURACTIV.com
Weber’s association represents the EU food and drinks sector, who can look at the big picture from a privileged perspective, as the biggest contributor to the EU economy in terms of turnover in manufacturing, jobs and EU gross value added.
“The message that the Single Market is good for the economy, for business, for workers, for consumers, has to come out more clearly,” said Industry Commissioner Elżbieta Bieńkowska, who has also described the Single Market as the beating heart of the EU in past declarations.
Small and medium-sized enterprises (SMEs) in food and drink industry, representing nine out of 10 manufacturers in the sector, could serve as a paradigm for highlighting the next challenges, as they have benefited the most from the creation of a single market.
The European Commission proposed a new €4 billion Single Market programme in its proposal for the 2021-2027 EU budget just for enabling Europe’s SMEs to unleash the potential of a well-functioning EU market.
“Large companies can deal more easily with the different requirements of different geographies,” said FoodDrinkEurope’s Weber, “but if SMEs did not have a single market, they would concentrate their business on one country again, eliminating the variety and the choice that exists today on foodstuffs in Europe.”
Probably the toughest political battle during the expiring legislative term was the one fought against the unfair trade practices (UTPs), aimed at enabling SMEs and small farmers to take full advantage of the Single Market.
The new UTPs legislation aimed to restore the imbalances in the EU food supply chain created by large operators against trading partners with weak bargaining power
“If I have to pick one UTP we cared about the most, I would go for the abuse of dominant position on conditions and payment terms,” Weber said, adding that they will continue to monitor the implementation of this new EU law in the member states through FoodDrinkEurope’s national members.
Labelling and digital
Another internal threat to the delivery of the Single Market comes from the long-standing and unsolved issue of food labelling.
“On country of origin indication, we’ve been very frustrated that Juncker’s Commission has not taken ownership of defining EU principles, also allowing certain member states to implement voluntary national labelling schemes,” said Weber.
He said the trend of national labelling’s proliferation, which hinders trade within the internal market, is also present in the nutrients information, with certain member states developing different schemes, like France did with the so-called ‘nutriscore’. The UK did the same with its traffic light system.
“If you are a small company, you cannot do a different packaging for each country,” he said, adding that not agreeing on a framework at EU level will only drive smaller companies to exit certain markets.
In today’s digital world, technologies like QR codes may help food labelling provide tonnes of information that consumer have increasingly required.
However, when it comes to the potential of a digital Single Market for food, Weber doesn’t expect a boom of online retail in the coming years. The reason is the proximity of food stores almost anywhere in Europe, but also the fact that European consumers want to select personally the fresh foodstuff they buy.
Single Market also needs to increase the resilience to external shocks, like Brexit and global trade tensions have recently shown.
UK’s tax authority (HMRC) estimates that the total administrative burden from post-Brexit customs declaration alone will cost more than €15 billion on both sides of the border.
The entire food chain, represented by farmers’ association Copa-Cogeca, the umbrella group of agricultural commodities traders CELCAA, and FoodDrinkEurope, has recently called for considering ‘pragmatic and temporary’ measures related to customs, labelling, food safety and logistics.
But along the immediate goal of avoiding the harsh impact of a no-deal Brexit, there is also the long-term one of building a positive relationship for the future, in the spirit of good neighbourliness.
[Edited by Zoran Radosavljevic]