Industry News
May 2009
feDSA presents the case for direct selling to government and trade officials in Prague
The Czech EU-Presidency is currently steering the all-important negotiations on the draft Consumer Rights Directive that includes a comprehensive reform of direct selling legislation in Europe. This was the background to a seminar held in Prague, on 11 February 2009, and the opportunity for Asociace Osobního Prodeje (AOP, the Czech DSA) and FEDSA to build on their good relations with those key officials in Prague who are currently handling the Directive.
This successful and well attended joint AOP/FEDSA seminar in the Czech capital was organised by AOP Chairman Jan Stránský and colleagues from direct selling companies operating in the Czech Republic. The 50 delegates included representatives of Czech government’s administration, consumer bodies and commerce – notably Mrs Kocová, Director in the Ministry of Industry and Trade and the person responsible for the Council of Minsters’ negotiations. Also present were Petr Kužel, President of the Czech Chamber of Economy; Jindřich Možný, Senior Officer of the Department of Competitiveness at the Ministry of Trade and Industry; Zdeněk Juračka, President of the Czech Confederation of Commerce and Michal Ševera, Vice-President for European affairs in the Czech Confederation of Commerce and Czech representative to the Eurocommerce. Also present were Professor Dana Zadražilová, Dean of University of Economics in Prague and several representatives of the Czech business press and media. Following an address by Mrs Kocová, FEDSA Chairman Richard Berry and legal adviser Jens Karsten had the opportunity to present the case for well self-regulated direct selling in strong and growing national economies and FEDSA’s views on the Consumer Rights Directive and the EU’s reform agenda.
All speakers expressed their support for direct selling as being not only vital for healthy retail markets, but to be welcomed as a means of fostering enterprise and providing much needed additional sources of family revenue – particularly in times of economic slowdown. Significantly, all speakers recognised that regulatory reform for direct selling needed to be seen in the context of the business opportunities it provides – and not just in terms of consumer protection.
The event was included in the official calendar of the Czech EU-Presidency and advertised with its official logo. The feedback in the national press was good. The leading economic daily “Hospodarske Noviny” published an article on “Direct selling not suffering in crisis so far.” The Entrepreneur also reported on direct selling in positive terms.
In his post-seminar report to FEDSA members, Richard Berry said: “This highly successful joint FEDSA/DSA seminar, which we intend replicating in other Member States that take on the EU Presidency, served as a good model for other DSAs. The attendance and participation of Czech policy-makers, and their prior understanding of direct selling, was a testament to the great work that has been done over the past few years by Jan Stransky and the Czech DSA in establishing good relationships with government and other interest groups in the Czech Republic.”
INTERVIEW
Malcolm Harbour, MEP, represents the centre-right (PPE) MEPs in the influential Internal Market & Consumer Protection Committee of the European Parliament. He actively supports deregulation within the Internal Market. In a recent interview, he told Richard Berry, FEDSA Chairman, how much he supported direct selling businesses and his encouragement for entrepreneurship in general.
RB: The current political cycle of the European Union is drawing to a close. In 2009, a new parliament will be elected and a new European Commission appointed. Ahead of the European elections of June 2009, what, in your opinion, were the main achievements of the European Parliament in the field of consumer policy during the term of the current Parliament?
MH: Of all that we have achieved I would name the Services Directive and the Free Movement of Goods Package as our main successes. With the Services Directive we provided European businesses with a legal framework that will enable them to thrive unhampered by barriers to trade. With the Goods Package, its corollary, we concluded a long-lasting process of market integration in the trade of goods. I’m confident that this legislative regime will be to the benefit of the many direct selling businesses you represent in FEDSA – particularly multinational companies.
RB: In the current Parliament, as a prominent member of the Internal Market and Consumer Protection Committee, I realise that you have been working on a wide range of issues. What would you like to see
as being the focus of your Committee’s activities during the next four year term of the next European Parliament?
MH: As you know, the European Commission recently proposed a comprehensive Consumer Rights Directive. The Directive aims to bring EC consumer law up-to-date including unfair contract terms, warranties, distance selling and off-premises trade. This is a major task. It will create a lot of work for my colleagues in the European Parliament and myself. We are hoping to achieve a good deal for both consumers and traders while taking our time for a thorough analysis of the Commission’s proposal. I am well aware that direct selling businesses still have to contend with widely varying levels of consumer protection in the 27 EU Member States. Getting this balance right, between consumer and business interests, with harmonised legislation, will be high on our agenda, as this new directive goes through the European Parliament.
RB: Direct selling, both in Europe and around the world, is based on the face-to-face sale of consumer goods and services. In Europe it is a distribution channel that accounts for annual sales of 20 billion euros. Although this sales volume currently represents barely 1 per cent of total retail expenditure it is a business sector that is growing strongly. Do you have any comments in support of this sector of trade and the benefits it provides to consumers?
MH: Ensuring that the EU develops as a strong and competitive single market with a healthy volume of cross border trade is a key political objective of the European Parliament. For many years, I have been aware of your distribution channel and the contribution direct selling companies have made to providing consumers with more product choice and customer service – in fair competition with other retail channels. Those well run and effectively self-regulated direct selling businesses, as represented by FEDSA, certainly have my support and encouragement.
RB: I know that you have been very active in supporting small enterprises, and in encouraging entrepreneurship and new business startups. How does direct selling fit into your thinking?
MH: It provides more and better earnings opportunities for women – particularly those with family commitments and limited time available. These are those who may be denied the opportunities of conventional employment. Europe has an urgent need to develop a stronger entrepreneurial culture. The inescapable fact is that starting a completely new business is not just risky, with a statistically high rate of failure, but one which requires an initial investment that is beyond the means of most men and women. What I applaud in direct selling is the opportunity you provide for anyone, with limited means, to take up a low cost and proven business opportunity that requires no more than dedication and perseverance, which is required in any new business.
RB: How do you think that direct selling can be sustained through this period of economic downturn?
MH: Clearly, the profile of goods sold – at the affordable end of the market – will make it more resilient than other sectors. More people may wish to take up the opportunity due to redundancy on reduced household circumstances. Continued investment in training and development of the direct selling salesforce will be crucial for successful businesses in reduced households, and will build a strong business when better economic conditions return.
RB: Malcolm Harbour MEP, thank you very much for your support and encouragement.
Malcolm Harbour was born in February 1947 and educated at Trinity College, Cambridge and in the University of Aston. He joined the Conservative Party in 1972 and has been a Member of the European Parliament since 1999 where he is the Conservative Party’s European spokesman on the Internal Market. Besides his membership in the Parliament’s Internal Market & Consumer Protection Committee, Malcolm Harbour is a substitute member of the Industry, Research & Energy Committee and also a substitute member of the Legal Affairs Committee. Malcolm Harbour lives with his family in Solihull, in the heart of the West Midlands Constituency.
