Brussels, 28 April 2026 – AIM, the European Brands Association, has submitted its contribution to the European Commission’s Call for Evidence on “Tackling unjustified Territorial Supply Constraints (TSCs)”, warning that there is no credible evidence to justify new EU regulation and that poorly designed intervention could even lead to higher consumer prices.
AIM stresses that any initiative should be grounded in a robust impact assessment that clearly defines its scope (products, actors and conduct), uses terminology aligned with EU law, and distinguishes between regulatory fragmentation and legitimate commercial decisions. It should also reflect how supply chains function in practice, including the dynamic roles of buyers and suppliers across the value chain.
The Commission’s justification in the Call for Evidence raises serious concerns for the ongoing impact assessment, notably due to unclear definitions, insufficient differentiation between regulatory and commercial drivers, and the risk of mischaracterising normal business practices as restrictions.
AIM highlights three key concerns:
- No pass-through from supplier prices to consumer prices: Evidence, including from the Commission’s Joint Research Centre (JRC), shows no proof of pass-through from supplier prices to consumer prices. Retailers set final consumer prices independently, meaning identical supplier prices can lead to very different consumer prices across countries. For example, Aldi has confirmed purchasing products centrally at identical prices across Europe, while retail prices vary depending on national market conditions. Even within retail groups, franchisees report limited ability to source more cheaply or pass on better conditions.This must also be seen in the context of private label products, which represent up to 50% of grocery assortments in many EU markets and are fully controlled and priced by retailers. Together, this highlights that retail decisions, not supplier prices, determine outcomes.
- Retail commercial margins explain price differences: Variations in retail commercial margins account for a significant share of price gaps across Member States. For example, retail commercial margins in Austria are around 30% higher than in Germany and such margins have increased across Europe over the past decade.
- No properly costed gains and clear unassessed costs: Remarkably, the Commission has not conducted a properly quantified cost–benefit analysis prior to including this measure in the Single Market Strategy. Claimed gains remain unproven, with estimates ranging from €0.5 billion to €28 billion based on highly uncertain assumptions, and would need to be revised downward if applied to a narrower group of manufacturers. Even at the upper end, these figures represent around 1% of total grocery expenditure in the EU—raising questions as to whether such limited effects would justify far-reaching intervention in complex supply chains. Crucially, the corresponding costs have not been assessed. Even on the Commission’s own logic, its flawed €14 billion estimate would imply around €3 billion in lost VAT revenues for Member States—raising the question of which EU countries would bear these losses. More broadly, intervention could lead to higher prices, reduced promotions, or less choice in lower-price markets.
Focusing narrowly on supplier practices risks misdiagnosing the issue. Price and availability differences across Member States also reflect structural factors such as national regulatory fragmentation, including VAT, labelling and packaging requirements, which shape how products are placed on markets, as well as diverse consumer preferences and behaviours.
Poorly designed intervention could have significant unintended consequences, including higher supply chain costs, reduced product variety and innovation, and a strengthening of large retailers at the expense of smaller operators.
More broadly, consumer welfare cannot be reduced to short-term price effects alone. As noted by the OECD and UNECE, “low prices as an instrument of social protection are too crude — most of the implicit subsidy goes to the well-off rather than the poorest.” The Draghi Report similarly warns that Europe has “prioritised efficiency and short-term consumer price effects over resilience and investment,” highlighting the risks of policy approaches that focus narrowly on price at the expense of long-term competitiveness and supply chain resilience.
“A policy built on unproven gains and uncosted consequences risks doing more harm than good. The Commission has not demonstrated that these measures will lower prices, and its own evidence shows no pass-through from supplier prices to consumers. Acting without solid evidence risks higher prices and less choice.” said Michelle Gibbons, Director-General, AIM.
AIM therefore calls on the European Commission to:
- carry out a comprehensive and transparent impact assessment, including full cost-benefit analysis
- address regulatory fragmentation as a key driver of market distortions
- prioritise enforcement of existing competition and Single Market tools before proposing new legislation
AIM remains committed to working constructively with EU institutions to support a strong, evidence-based and well-functioning Single Market
