The end of the grocery store?

By Viviana Spaghetti July 10, 2019 11:16 am

Online shopping is on the rise and consumers are faced today with a greater variety of products that they can purchase from anywhere in the world, day and night. This is also true in the food sector, where in 2017, 24% of individuals in the EU bought food online, compared to 11% a decade earlier.

Even though the proportion of food products sold online is still low compared to other goods sold on the Internet, further growth is anticipated for online sales of foods in the coming years. This will generate new business opportunities as food companies can significantly expand their consumer reach. For consumers, it will mean an almost unlimited choice of products that they can buy with one click from the comfort of their own home. Goodbye carrying heavy shopping bags!

While it is too soon to say how the market will develop in the next decade or so – think about Amazon Go and HelloFresh, both released less than 5 years ago, it is already clear that the incredible growth of online sales does not come without concerns for businesses, consumers and regulators alike. Will this incredible growth mean the end of stores as we traditionally know them? Or result in empty high streets and job losses in the retail sector?

Some of these challenges were discussed at a conference jointly organised by the European Commission and the German Federal Office of Consumer Protection and Food Safety (BVL), designed to bring together relevant stakeholders to discuss e-commerce of food and its impact on consumer safety, amongst others. During the three days conference, attendees heard from a variety of stakeholders including representatives from online marketplaces such as eBay, bricks and mortar retail sector and supervising authorities from across Europe, the latter being tasked with preventing consumers from being misled and ensuring that all products available to consumers are safe for consumption. A challenging mission! And indeed, a fact-finding mission carried out by the European Commission in 2017 found that official controls over food sold online were limited across the EU and a coordinated control plan on food supplements quickly found around nearly a thousand non-compliant products online.

A new Regulation on Official Controls will start applying at the end of the year and will allow Member States to order products online without identifying themselves and impose penalties for non-compliance regardless of the location of the operator. This will already help enforcement authorities safeguard the protection of consumers online without in any way dismantling the online market that is the future of shopping.

Yet, the developments on the digital economy have led to lively discussions among stakeholders, and the media, on the responsibilities of e-traders and e-platforms in ensuring all products sold to European consumers are safe and compliant with the EU legislation. These platforms are frequently used by non-registered businesses – which are often based outside the EU and may not be aware of its stringent food safety laws – to enter and exit the online marketplace without being subject to any controls. Despite the role they play, under the E-Commerce Directive, platforms that function as “hosts” are currently exempt from liability when unlawful content is uploaded by users.

So, do we need a more stringent regulation to tackle this issue? There have been some notable examples of effective cooperation between platforms and enforcement authorities to ensure full compliance online. However, the E-Commerce Directive is nearly 20 years old and with the online market having developed significantly since then, there is now a drive to modernise these rules and make them more fit for purpose.

The Whitehouse team are experts in food law and regulation, providing political consultancy and public affairs advice to a wide range of food manufacturers, distributors and consumer organisations, not only in the United Kingdom, but also across the member states of the European Union. More information about our food and drink policy experience can be found here, or, if you have any questions, please get in touch.

By Viviana Spaghetti July 10, 2019 11:16 am

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