By Maria Lundqvist*
Athens, May 20, 2024
Greek Prime Minister Kyriakos Mitsotakis has taken a firm stance against Territorial Supply Constraints (TSCs) by penning a letter to European Commission President Ursula von der Leyen, urging immediate and decisive action to address the issue within the European Single Market.
TSCs are restrictive practices imposed by multinational manufacturers to prevent retailers and wholesalers from freely sourcing products across the European Single Market. According to a past study by the European Commission, these constraints cost EU consumers over €14 billion annually.
In his letter dated May 18, Mitsotakis expressed deep concern over the negative impact of TSCs on consumer purchasing power, especially in light of recent economic challenges. “The recent inflation crisis has led to a significant erosion of the purchasing power of European citizens and has highlighted the asymmetric power of some large multinational companies in terms of their differentiated pricing policy vis-a-vis individual member states,” Mitsotakis wrote. He emphasized the untapped potential of the EU’s collective power to address these issues.
Mitsotakis stressed the urgency of the situation, particularly with the upcoming European elections. He argued that the EU must demonstrate its ability to prioritize and effectively solve problems that directly affect European societies, such as high prices. “Tackling high prices is undoubtedly one of the key issues of concern,” he stated, calling for swift and effective intervention.
The Greek premier advocated for “bolder steps” to enhance competition and transparency within the Single Market, ensuring that all EU citizens, regardless of their country of residence, benefit from the European project. He highlighted the need for comprehensive EU-level legislation to address the practice of TSCs, which artificially inflate prices of branded essential consumer goods in certain member states compared to others.
Mitsotakis proposed several key measures to combat TSCs:
- Strengthening EU Competition Law: Reinforcing regulations to prevent anti-competitive practices that enable TSCs.
- Prohibiting Unfair Commercial Practices: Outlawing practices that hinder parallel trade across member states.
- Removing Language Restrictions on Product Labeling: Allowing products to be sold across the EU without unnecessary language barriers.
- Preventing Differentiated Pricing Strategies: Ensuring multinational companies cannot apply different pricing for the same products in different member states.
Mitsotakis concluded his letter by emphasizing the importance of these measures in promoting fair competition and protecting consumer rights within the Single Market. He urged the European Commission to take the lead in addressing this pressing issue, demonstrating the EU’s commitment to fostering a truly integrated and equitable market for all its citizens.
*Maria Lundqvist, a dedicated collaborator at Smartencyclopedia, whose expertise lies in European affairs, diplomacy, geopolitics, and international relations. Maria’s profound knowledge and keen insights into these fields make her an invaluable asset to our platform.