Independent Retail Europe (formerly UGAL - Union of Groups of Independent Retailers of Europe)

PACKAGING AND PACKAGING WASTE REGULATION - POSITION PAPER - APRIL 2023 Ref. Ares(2023)2888817 - 24/04/2023 2 EXECUTIVE SUMMARY Independent Retail Europe membership supports the stated objectives of the European Green Deal, the Circular Economy Action Plan, as well as the global objectives of the new Packaging and Packaging Waste Regulation (PPWR). We therefore welcome the Commission’s objective to gradually harmonise packaging rules across the EU. This will avoid a further proliferation of different packaging and packaging waste systems in the Member States and thus reduce hurdles to the free movement of goods across the Single Market.

…waste systems in the Member States and thus reduce hurdles to the free movement of goods across the Single Market. Independent Retail Europe membership represents independent SME retailers that have joined in groups to enable for instance, joint purchasing, advertising and investment in private labels, in order to obtain economies of scale, to be able to compete with large integrated chains. These retailers and their wholesale organisations have already implemented various national solutions to improve their waste management system and have experience with different re-use systems due to their unique business model which allows every retailer to choose what works best for his customers and for his business.

…unique business model which allows every retailer to choose what works best for his customers and for his business. As such, independent retailers have the following remarks:  The proposed PPWR needs to take into account that rules on packaging and waste management are currently still very different across the EU. Existing well-functioning national deposit return systems should continue to co-exist.  Any rules on re-use and refill need to address all concerns regarding hygiene standards, provide retailers with sufficient legal certainty, and provide for a smooth operation of logistics chains.  To avoid a distortion of the playing field between groups of independent retailers and their competitors, integrated chains, groups of independent retailers should also explicitly be allowed to meet the targets for refill and re-use at group level, and not at store level.

…should also explicitly be allowed to meet the targets for refill and re-use at group level, and not at store level.  For reusable packaging, the availability and standardisation will be key.  For recyclable packaging, the availability of alternatives is essential. Any policy option prohibiting non-recyclable packaging and aiming to increase recycled content in manufactured products must carefully consider the availability of recyclable alternatives, the impact on the market for secondary raw materials and the impact on the environment due to pollution linked to chemical recycling.  The definition of transport packaging should consider the constraints of SMEs online sales channels.  It is important to distinguish between e-commerce packaging and transport packaging that is not meant to be discarded in the ordinary household waste.

…between e-commerce packaging and transport packaging that is not meant to be discarded in the ordinary household waste.  A ban on non-reusable packaging for the transport of goods within one Member State would require imported goods to be repacked when entering the EU market. Such an obligation should not lead to an obligation to unnecessarily repackage imported goods.  Requirements on labelling must always allow sufficient time to sell-off of products that have already been placed on the market.

…on labelling must always allow sufficient time to sell-off of products that have already been placed on the market.  The obligations of distributors need to be aligned with the previously amended General Product Safety Regulation 3 COMMENTS OF INDEPENDENT RETAIL EUROPE ON THE PACKAGING AND PACKAGING WASTE REGULATION General remarks on the necessity to recognise national approaches It is important to note that the rules on packaging, waste management and deposit return systems are currently very different across the EU. Actors in the EU will therefore have to adapt in many different ways to the circular waste system that is being proposed at EU level. There are important differences in the organisation of waste management systems. The success of each waste management system (i.e.

…differences in the organisation of waste management systems. The success of each waste management system (i.e. the reduction of waste, rate of re-use, recycling) is dependent on the particular system that is prevalent in that country. There are different ways to obtain good results, which needs to find recognition in the legislation. In Belgium for example, the near perfect collection rate of bottles and containers has permitted to achieve very good recycling rates, whereas in Germany good results have been achieved through the collection of bottles and cans through reverse vending machines. We invite the European legislators to work on a European legislative framework that does not rule out existing national solutions whilst respecting the importance of the Internal Market.

…framework that does not rule out existing national solutions whilst respecting the importance of the Internal Market. Companies have already made the required investments and should be allowed to obtain return on these investments, and not be required to reinvest once more to comply with EU law. Members also highlighted, that there are already legal definitions at national level determining what can be considered “reusable” and what not. These national definitions should be taken into consideration. The definitions in Article 3.22 need to carefully consider any possible consequences for national rules on packaging. It is of upmost importance, that all actors along the chain are given sufficient time to implement and adapt to the new rules. Certain changes may require more time than others.

…are given sufficient time to implement and adapt to the new rules. Certain changes may require more time than others.  The proposed PPWR needs to take into account that rules on packaging and waste management are currently very different across the EU and require retailers to start from different positions.  Businesses have already invested in order to comply with national approaches to waste management. If national systems are efficient in achieving European objectives, companies should not be required to make additional investments in order to comply with an EU harmonised system of waste management.  In any case, operators should be given sufficient time to implement and adapt to new rules. 1. Re-use and refill obligations Retailers sell ready-prepared food, hot and cold take-away beverages, as well as alcoholic and non- alcoholic bottled beverages.

…sell ready-prepared food, hot and cold take-away beverages, as well as alcoholic and non- alcoholic bottled beverages. They would therefore have to comply with the re-use and refill targets set 4 out in Article 26. Whilst in many countries there are already different systems in place for reusable packaging for bottled cold beverages, often through Deposit Return Systems (DRS), we are less aware of existing refill/re-use initiatives for hot beverages or prepared food at retail level. In what concerns re-use and refill obligations, our members are concerned about the feasibility of the proposed solutions. Any increase in re-use targets will lead to new logistical challenges. Re-use and refill schemes require further consideration before their implementation to avoid major disruptions in logistics chains and unnecessary costs for retailers and consumers.

…their implementation to avoid major disruptions in logistics chains and unnecessary costs for retailers and consumers. For all those products for which the Regulation sets out re-use and refill targets, it will be paramount to have sufficient, standardised packaging to allow for a workable, sustainable, cost-efficient open/closed loop deposit, return, cleaning, filling and re-distribution system for reusable/refillable packaging. The reporting obligations set out in Article 28 regarding the refill and re-use targets are likely to lead to another considerable administrative burden for operators. Members report that similar reporting schemes are already in place in some Member States. Where that is the case, there should be no additional administrative burden.

…already in place in some Member States. Where that is the case, there should be no additional administrative burden. In Member States where no such schemes are in place, retailers will not have access to the required data at the point of sale level. This will require a costly change of IT- systems that should go with sufficiently long transition periods. Moreover, the Commission suggests adopting delegated acts (Art.26.16) to set re-use and refill targets for additional product groups, exemptions for economic operators, and exemptions for specific packaging formats. For economic operators, legal certainty is crucial. Potentially higher targets or targets for additional product groups will have a serious impact on our members’ business decisions and strategies, since deposit-return systems and other systems for re-use and refill require important long-term investments.

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COMMISSION PROPOSAL VAT IN THE DIGITAL AGE - COMMENTS OF INDEPENDENT RETAIL EUROPE - 4April 2023 Ref. Ares(2023)2431876 - 04/04/2023 2 EXECUTIVE SUMMARY Independent Retail Europe welcomes the opportunity to submit comments on the Commission’s proposal “VAT in the Digital Age”. The package proposed will have wide implications on the invoicing systems (and related data infrastructure) of groups of independent retailers and SME retailers. We would therefore like to bring comments on the following aspects of the proposals:  We support the extension of the one-stop-shop and of the deemed supplier rule (in cross- border B2B contexts) and the proposal for a single VAT registration system. Clarification of the conditions of application of the reverse charge should be provided.  The generalisation of e-invoicing must make possible the continued use of existing EDI standards (e.g.

…be provided.  The generalisation of e-invoicing must make possible the continued use of existing EDI standards (e.g. EANCOM® and SAP IDoc). Their mandatory replacement by a new single EU standard would hit hard the retail ecosystem.  The two-day deadline for e-invoicing is unrealistic for SMEs and should be replaced by a 30- day deadline.  The end of summary invoices create major issues for (cooperative) groups of independent retailers and SME retailers.  Digital reporting on a transaction per transaction basis would impose disproportionate burdens on SMEs  You will find below greater details on these aspects and their importance for groups of independent retailers and SME retailers. COMMENTS OF INDEPENDENT RETAIL EUROPE ON THE PROPOSAL VAT IN THE DIGITAL AGE 1.

…retailers and SME retailers. COMMENTS OF INDEPENDENT RETAIL EUROPE ON THE PROPOSAL VAT IN THE DIGITAL AGE 1. Extension of the one-stop-shop and single VAT registration We welcome the extension of the VAT One Stop Shop, which will allow businesses selling to consumers in another Member State to register only once for VAT purposes for the entire EU, and to fulfil their VAT obligations via a single online portal. This will considerably decrease administrative burdens for retailers operating cross-border. We also welcome the expansion of the deemed supplier rule in the platform economy, as this will curb tax evasion and create a level-playing field. Moreover, the general extension (through a modified article 194) of the reverse charge mechanism in B2B cases to all transactions where the supplier is not established (for VAT purposes) in the Member State in which VAT is due, is also welcome.

…where the supplier is not established (for VAT purposes) in the Member State in which VAT is due, is also welcome. This will reduce tax risks and disadvantages in such situation. Lastly, in relation to the extension of the reverse charge mechanism, we suggest to define in more details the conditions of application of the deemed supplier rule, in order to avoid situations where the ‘Missing Trader fraud” can happen at national level. Our position:  We support the proposed expansion of the VAT one-stop-shop and deemed supplier rules 3  We support the proposed modification of article 194, which extend the reverse charge mechanism to all cross-border B2B transactions  We ask to specify/clarify the conditions of application of the (extended) deemed supplier rule, especially to avoid situations of ‘Missing Trader Fraud’ organised at national level. 2.

…deemed supplier rule, especially to avoid situations of ‘Missing Trader Fraud’ organised at national level. 2. The generalisation of e-invoicing requires the continuation of the use of existing EDI (Electronic Data Interchange) standards and should be feasible for small enterprises a) Replacement of existing EDI standards by a new EU standard would create immense difficulties and hit hard the retail ecosystem We support the abolition of paper invoices and the proposal to generalise e-invoicing (new article 218). In this regards, the deletion of article 232 (requiring the other party its consent to dematerialise the invoice) appears indeed necessary. However, it is of critical importance for retailers (and their eco-system) to ensure that the current EDI standards established and used for e-invoicing (e.g.

…retailers (and their eco-system) to ensure that the current EDI standards established and used for e-invoicing (e.g. such as EANCOM® and SAP IDoc) can continue to be legally used, and are not replaced by a new EU standard. Indeed, the mandatory use of a new (EU) standard for e-invoicing would require a very deep redesign of existing ERP (Enterprise resource Planning) Systems. This would not be manageable for retailers (neither time-wise nor financially), as the standards currently used also contain data required for merchandise management. The mandatory implementation of a new EU standard in this field would therefore require the creation of and agreements on new standardised data sets related to merchandise management. Existing EDI standards in this field are the result of several years of coordination between the respective market participants on different levels of the value chain.

…of several years of coordination between the respective market participants on different levels of the value chain. The establishment of new standards therefore could be only maintained by new sectorial agreements with a respective long lead time; we doubt that it would be achievable within a reasonable time frame and would lead to major costs for every single market participants in the retail ecosystem. Lastly, existing ERP-Systems are also used to exchange sector specific data beyond the mere accounting/invoicing dimension. A new single standard for e-invoicing might therefore threaten established information exchange architectures, their respective sectorial data pools and the resulting added value. This would severely impact competitiveness in the retail ecosystem.

…sectorial data pools and the resulting added value. This would severely impact competitiveness in the retail ecosystem. We therefore urge the Commission to ensure that existing EDI standards can continue to be used in the context of a generalisation of e-invoices. Our position:  A new mandatory EDI standard for e-invoicing would have immense negative consequences for all market participants in the retail eco-system.  Ensure that companies can continue to use existing EDI standards (e.g. EANCOM® and SAP IDoc) once the Commission proposal is adopted. b) Generalisation of e-invoicing may be challenging for small companies 4 Although we globally support the generalisation of e-invoicing, we would like to stress that many small companies will lack the sufficient IT infrastructure to implement the technology needed for e-invoicing.

…many small companies will lack the sufficient IT infrastructure to implement the technology needed for e-invoicing. Their situation should be considered to allow for a smooth transition. Our position:  Consider the specific challenges faced by small companies without the IT infrastructure to generalise e-invoicing. Specific rules and transitions may be needed. 3. A two-day deadline for e-invoices is unrealistic for SMEs The proposed replacement of the existing 45-days deadline for the issuance of invoices on intra- community supplies of goods and services by a 2 working days deadline will create major issues for SME retailers (and even larger companies), while not being necessary to combat tax fraud. A two-day deadline will be extremely demanding for accounting units, especially in small enterprises.

…combat tax fraud. A two-day deadline will be extremely demanding for accounting units, especially in small enterprises. Many such small companies still use manual processes for recording deliveries and subsequent invoicing. In this (manual) context, a 2-day deadline will simply not be workable on the ground. In addition, we foresee the following difficulties:  The two-day deadline will lead to an increase in the number of invoices, as businesses will want to ensure they issue invoices within the deadline by all means, meaning that many will start invoicing for fractions of large orders. This will put accounting units under high pressure.  Technical problems will arise, as the issuance of invoices often depends on the date of delivery of certain goods.

 Technical problems will arise, as the issuance of invoices often depends on the date of delivery of certain goods. Friction in the shipment processes will make it very difficult to estimate correctly the delivery date of certain goods (part of an order), and may compromise the ability to plan and execute the invoicing within the two-day deadline. This is especially true when it comes to cross-border orders/deliveries.  Such a short deadline will not allow businesses to clear and correct false orders, transaction failures or inaccuracies in the delivery before issuing the invoice. The current 45-day deadline gave businesses the flexibility to address the issues mentioned above. Although we understand the need to reduce it, two-days seems completely unrealistic in practice.

…mentioned above. Although we understand the need to reduce it, two-days seems completely unrealistic in practice. We would therefore encourage the Commission to propose a 4-week deadline, which seems more realistic in light of the above aspects. Our position:  We strongly oppose the proposed two-days deadline for issuing invoices, as it is unrealistic in SMEs and will lead to many technical problems (especially in cross-border orders/deliveries), while preventing to correct order/deliveries mistakes before invoicing.  We instead recommend to introduce a 4-week deadline (instead of the current 45 days). 4. End of summary invoices create major issues for (cooperative) groups of SME retailers 5 The proposed deletion of article 223 would end the possibility to issue summary invoices.

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REDUCING PACKAGING WASTE: REVIEW OF RULES - COMMENTS OF INDEPENDENT RETAIL EUROPE - 06 JANUARY 2021 Ref. Ares(2021)150660 - 07/01/2021 2 COMMENTS OF INDEPENDENT RETAIL EUROPE Independent Retail Europe represents groups of independent retailers. The group model allows independent entrepreneurs to assist each other, operate under a common brand and benefit from economies of scale, e.g. through facilitating joint purchasing. Since stores are run by “locals” they know how to cater to local needs and give a “local touch” to shopping experiences. This down-to- earth style of doing business also makes our members especially responsive to consumer demands, e.g. for more sustainability in the food chain. We commend the Commission’s persistent efforts to reduce packaging waste in the Single Market.

…in the food chain. We commend the Commission’s persistent efforts to reduce packaging waste in the Single Market. Many Member States have already taken a number of measures in this area, in particular deposit systems, not only for beverages, but also for, for instance, fruit and vegetable trays, and bans on the use of plastic bags (e.g. in Germany the retail sector has reduced the use of plastic bags by 70 % since 2015). Apart from national regulation, there have been voluntary efforts by retailers in different Member States in this area which are giving very good results and proved to be more successful than regulatory measures, for instance with regard to reusable palettes and crates. Our members, too, have made great strides in reducing product packaging over the past years.

…palettes and crates. Our members, too, have made great strides in reducing product packaging over the past years. While further improvements are certainly possible, we would like to note the continued importance of adequate packaging in both the food and the non-food sector. When discussing packaging solutions, logistics and hygiene aspects, the availability of affordable alternative sustainable packaging, food waste prevention, and adequate consumer information should always be taken into account. In the food sector, the shelf life of certain fresh food products can be greatly extended thanks to the sensible use of thin plastic wrappers, a crucial factor in reducing food waste. Recent years have seen new innovative solutions become market-ready.

…wrappers, a crucial factor in reducing food waste. Recent years have seen new innovative solutions become market-ready. Our members are among the early adopters of innovative alternatives to plastic packaging, such as natural branding and natural, edible coatings. The testing and acceptance of such products for all types of perishable fruits and vegetables could reduce the need for packaging of these products. Since the beginning of the COVID-19 pandemic, our members have noted increased demand for packaged fresh foods, as consumers reduce the number of store visits and stock up on food. At the same time, unpacked goods that are handled by customers directly, are more likely to be contaminated by the novel coronavirus and other infectants. The importance of packaging as a hygiene measure is often overlooked.

…the novel coronavirus and other infectants. The importance of packaging as a hygiene measure is often overlooked. Beyond preventing waste, packaging also enables retailers to meet regulatory requirements as it plays a vital role as a carrier of information to consumers such as traceability requirements and in distinguishing organic food from conventional products. The ever-increasing amount of mandatory labels and other information is contributing to larger-than-necessary packaging. If packaging is to be further reduced, this could be achieved with more flexibility on digital labels. Another important role of packaging is the protection of the products during their course through the supply chain. Too little or too feeble packaging leads to more product waste in transport and warehouses.

…through the supply chain. Too little or too feeble packaging leads to more product waste in transport and warehouses. 3 Whilst considering the reduction of certain types of packaging, the availability of suitable, safe and sustainable alternative packaging solutions should always be taken into account. Packaging products should therefore be evaluated on their purpose with regard to their content and their merit for that purpose, as well as available alternatives. General prohibitions and taxation should be avoided. Ultimately, it is the responsibility of the industry to improve packaging materials and design and enable its cost-effective recycling and reuse. There are still too many types of non-recyclable packaging or types of packaging that require specific, individual and expensive collection and recycling processes.

…or types of packaging that require specific, individual and expensive collection and recycling processes. Retailers are doing their part by promoting more sustainable choices and as points of collection. Our members stand ready to push for further reductions in superfluous or environmentally harmful packaging. With regard to the use of recycled food contact materials, we believe EU law needs to be refitted and fully harmonised. More flexibility in the marketing codes for food packaging products would help increase the use of recycled materials. As a first step, the remaining potential of mechanical recycling should be further explored. As a second step, options for chemical recycling can be considered. Better use should be made of marker- based sorting systems. Concerning biodegradability, we fully support the harmonisation of EU legislation and standards in this field.

…systems. Concerning biodegradability, we fully support the harmonisation of EU legislation and standards in this field. In particular, sustainability criteria and separate collection systems where needed, should be developed. We also note that what is recycled and how differs drastically, not just from one Member State to another, but even among municipalities. This is why we expect universal labelling obligations to be complicated to implement and enforce. Such obligations should therefore be preceded by a harmonisation and upgrade of collection and recycling systems across the EU to allow for better separation and recycling of ingredients in different types of packaging. This implies that some Member States will have to increase their recycling capacities quite significantly.

…packaging. This implies that some Member States will have to increase their recycling capacities quite significantly. To promote cross border trade and avoid territorial supply constraints due to packaging constraints, it is also important that packaging requirements and recycling systems are harmonised across the Single Market. It should be noted that whilst efforts are made to reduce packaging waste all along the supply chain, online sales are increasingly leading to more use of packaging and consequently, packaging waste. We look forward to engaging productively in the upcoming discussions on the review of packaging rules as part of our shared ambition to create a more sustainable European Single Market.

…on the review of packaging rules as part of our shared ambition to create a more sustainable European Single Market.  Discussions on reducing packaging waste should always take logistics and hygiene aspects, the availability of affordable, sustainable alternatives, food waste prevention and consumer information into account;  Packaging products should be evaluated on their purpose with regard to their content and their merit for that specific purpose, as well as available alternatives.

…purpose with regard to their content and their merit for that specific purpose, as well as available alternatives. General prohibitions and taxation should be avoided;  More flexibility on digital labels will allow for smaller packaging sizes; 4  Manufacturers should be incited to develop and market more recyclable packaging that retains its qualities after recycling;  Recyclable food contact materials: EU law needs to be refitted and fully harmonised;  More flexibility in the marketing codes for food packaging products would help increase the use of recycled materials;  Raising and upgrading recycling capacity across the EU is key.

…would help increase the use of recycled materials;  Raising and upgrading recycling capacity across the EU is key. Harmonisation of packaging requirements, collection and recycling systems across the Single Market should precede the introduction of new universal labels; Original version: English – Brussels, 06 January 2021 Established in 1963, Independent Retail Europe is the European association that acts as an umbrella organisation for the main groups of independent retailers in the food and non-food sectors. Our members are groups of independent retailers, associations representing them as well as wider service organizations built to support independent retailers.

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