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EU considers controversial new etailing rules

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3rd Feb 2010
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The European Commission met with EU member states this week to consider introducing new rules that they claim will even the playing field between traditional bricks and mortar and online retailers.

The move came as a new survey indicated that UK shoppers are the keenest in Europe to indulge in ecommerce, accounting for a third of all European online sales.

A study undertaken by the Centre for Retail Research indicated that UK consumers spent £38 billion or the equivalent of £1,070 per shopper on internet-based purchases in 2009. The figure equates to 10% of all retail sales in the country, but is expected to rise to by almost a fifth to £42.7 billion over the year ahead.

According to Bruce Fair, managing director of price comparison website Kelkoo, which commissioned the research, the impact of the recession helped to explain the increased appeal of online shopping.

He said: "In these hard times, it is no surprise that shoppers are turning to the internet rather than the High Street, especially when you consider that purchasing items online can result in savings of 20% or more."

But it is just this ability to offer hefty price reductions that is concerning the EC. It is worried that bricks and mortar retailers make substantial investments in their brands, for example, by installing in-store displays or providing pre-sales training for staff, but sales often end up being diverted to pure-play online retailers that do not have such overheads. This means that they are then able to sell goods at a lower price.

As a result, the Commission is considering whether it should allow manufacturers to demand that retailers wishing to sell their goods have bricks and mortar stores in place and that they sell a minimum of goods in both value or volume terms via such shops.

Critics such as Amazon have slammed the move as restraint of trade, claiming that consumers will suffer due to reduced choice.

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By CobbleSoft
04th Feb 2010 15:42

Surely such moves are anti-growth and anti-climate-change-aware?  Forcing business to create a physical presence or, indeed, encouraging people to drive to the huge malls rather than shop online is going to actually increase carbon emissions.  The EU needs to realise the world is moving increasingly to an online world, whether we like it or not, and negating the need for bricks and mortar may actually be a good move for the environment.  It would seem that the EU is fighting its own remit on this one!

-- Richard J Stevenson
CobbleSoft International

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