Seldia Newsletter December 2013

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You are subscribed to the European Direct Selling Association’s Newsletter

December 2013
Newsletter

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Dear Friends of Direct Selling,2013 has been a solid and steady year for the Direct Selling industry, as we have once more been able to report a year of growth amidst difficult economic times. For us in Brussels, the Irish and Lithuanian EU Council Presidencies have guided the EU in a steady fashion and we look forward to working with the upcoming Greek and Italian Presidencies in what will be an exciting next phase in European Union history. 2014 will be a year full of changes, with new laws on Consumer Rights and on self regulation coming into force and with the reshuffling of the political landscape with the elections of a new European Parliament and for the first time an elected EU Commission President.

Best wishes for 2014,

Maurits Bruggink
Seldia Executive Director

Industry News

Herbalife wins legal case in Belgium
On 2 December, Seldia member company Herbalife won a legal case in appeal against Belgian consumer organization “Test Achat” that accused the company of operating a pyramid scheme. In its ruling, the Appeal Court applied a provision in Belgian law, which is the transposition of the pyramid clause in the European Unfair Commercial Practices Directive (UCPD). The ruling, although only having effect in Belgium, may therefore be an orientation for possible future rulings in Europe involving the UCPD.

The case in first instance was lost by Herbalife, but the company identified a number of factual errors in the ruling and appealed. The main conclusion of the Appeal Court is that the company operates a legal retail-wholesale business based on sales of products to consumers. Like all other direct selling companies, the company has operating provisions that avoid products from staying within the distribution network, like generous buy-back guarantees. This was illustrated by the fact that the consumer organization was unable to submit to the Court any complaint of a distributor.

The ruling is important to the entire direct selling industry as it clarifies the solid legal environment in which direct selling companies operate. Furthermore it undermines recent investor speculations against listed direct selling companies. 

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Global Direct Selling survey for 2014
The WFDSA-Seldia global direct selling survey to report on 2013 data will be launched on 14th of January 2014.  Objectives of this survey are to size the global direct selling industry, quantify direct sellers in segments and collect data on the socio-economic impact of direct selling.  WFDSA’s aim is to announce final results of the survey by May 31, 2014.  DSAs and companies will be invited to join in a webinar on 16 & 17 January during which the process and objectives of the survey will be outlined and all questions will be answered.   

We count on all and everyone’s participation!

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French DSA enters new Partnerships
On 29 November, the French DSA signed a collaboration protocol with the Ministry of Higher Education and Research, in the presence of Minister Geneviève Fioraso, the University’s Conference of Presidents and the Conference of French Engineering schools. This partnership will enable the French DSA to pursue its ground breaking collaboration in integrating direct selling within higher education programs even further. 

Furthermore, on 5 December, the French DSA signed an agreement with the regional employment center for Upper Normandy in the presence of the regional French DSA president. This agreement aims at encouraging and facilitating the access to direct selling for the unemployed.

Website of the FVD

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Italy reports strong growth in Direct Selling
The data collected by Istat from the 35 member companies of the Italian DSA AVEDISCO for the period of January until September 2013, reconfirms further growth of the Italian direct selling sector: a total turnover of nearly  € 585 million and with 316 394 persons in charge of sales, showing an increase of + 3.47% and +18.52% compared to the same period last year. Nearly 50,000 more people have chosen to rely on this business model to achieve professional growth. These results are in sharp contrast with the performance of traditional retailing today, based on Istat data, attests a decline in sales of 2.3%. 

The leading product category is food and nutrition, producing a turnover of more than € 227 million, representing an increase of 14 million compared to the same period of 2012. The second largest product category are ” cosmetics and fashion accessories ” with around  € 202 million turnover. Giovanni Paolino, president of AVEDISCO stated: “Our ongoing commitment is to retain our partners, whether they are in charge of sales or consumers. Professionalism and quality are the key words that drive the protagonists of the direct sale of our Associates. Our goal is continuous improvement to increase the standard of our offer, ensuring safe products and personalized services.”

Website of AVEDISCO

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Personnel Changes in Spanish and Italian DSA’s
Juan Turró will step down as Executive Director of the Spanish DSA as of 1st of January 2014.  As a consequence Juan Turró resigned from his positions in the Seldia Board of Directors and in the Ethics Committee.  The new General Secretary of the Spanish DSA will be Agustín Roqué from Grupo Bonmacor, a leader company in managing projects for associations and corporate collectives and has years of international experience, including in the foodstuff area.  (www.avd.es)

In Italy, Giorgio Giuliani, Honorary Chairman of Avedisco, the Italian DSA and member of  the Seldia Board of Directors, will retire at the end of this year and has consequently resigned from his position in the Seldia Board of Directors.  (www.avedisco.it)

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EU AT A GLANCE

Implementation of the Consumer Rights Directive  
Friday 13 December 2013 marked the official  deadline for Member States to introduce the European Union’s Consumer Rights Directive into national law. The EU legislation will strengthen consumers’ rights in all 28 EU countries. The new rules will for example ensure an EU-wide withdrawal period of 14 days meaning that consumers can return goods for whatever reason if they change their minds. Direct Selling companies and distributors will have to adapt their order forms to a newly harmonized European model.

The European Commission put forward the proposal for a new set of consumer rights in October 2008. Following agreement on the legislation in 2011, governments have had two years to implement the rules at national level and should by today have done so. So far around half of the 28 Member States have already fully implemented the directive or merely require a last formal legislative approval. To Seldia’s knowledge these countries are: The Czech Republic, Belgium, Bulgaria, Cyprus, Finland, Germany, Greece, Hungary, Ireland, Lithuania, Netherlands, Slovenia, Spain, Sweden and the United Kingdom. For the Member States that have missed the deadline, the most important is that the laws enter into force before 13 June 2014, if this deadline is missed again – the directive will automatically apply.

While it is a full harmonization directive, it is also a complex piece of legislation that in some countries is transposed into different existing national laws and with certain elements being left to the discretion of Member states to set. Seldia, European DSA’s as well as the European Commission are therefore closely monitoring the implementation of this directive. 

EU Commission monitoring of CRD Implementation, click here

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ECC Report on Enhanced Consumer Protection
The European Consumer Centre Network (ECC-Net) published a report on “Enhanced Consumer Protection – the Services Directive 2006/123/EC, Analysis of Article 20.2 and Article 21 related consumer complaints reported to ECC-Net between 2010 and 2012”. The report is by examining situations in which consumers are confronted with different treatment or refusal to provide a service, seeking to analyse business practices observed and gather guidelines as to what may be deemed to be an objective justification for the application of different treatment.

The main objectives of the report are threefold:
– Analyse work done by ECC-Net under Article 21 and the main problem areas under Article 20.2of the Services Directive;
– Alert enforcement authorities about problems relating to the Services Directive, especially possible breaches of Article 20.2;
– Raise awareness of the protections offered to consumers under the Services Directive.

Around 74% of the complaints concerning services received by the ECC’s related to situations where consumers faced a difference in price or service when buying online goods (music, books, etc.). 21% of the
complaints related to services in the tourism industry and the remaining 5% was in the rental and leasing services sector.

The report can be found here
For more information, click here 

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EU Parliament Report on UCPD
Over the course of the last six months Seldia supported Members of the European Parliament in their drafting of an own initiative (non-legislative) report on the application of the Unfair Commercial Practices Directive. A “cornerstone” directive of the EU, the UCPD is as we know an important piece of EU legislation for the Direct Selling sector and all other sectors involved in business to consumer commercial practices. 

On 17 December the own initiative report on the application of the UCPD was approved by and underwent a series of votes in the Internal Market committee of the European Parliament where amendments proposed by different political groups were voted into the text or rejected. Two amendments concerned the notion of whether or not “doorstep selling and off-premises sales” should be highlighted as particularly problematic. Seldia engaged in a successful advocacy campaign which resulted in the rejection of these amendments, on the basis that the EU should focus on unfair practices in all sectors rather than stigmatizing one in particular. 

Amongst several conclusions, the consolidated text of the report calls on the EU Commission not to extend the scope of the directive to Business-to-business practices, to issue another report on the directive’s implementation in two years time and for Member States to focus on the correct implementation and enforcement. 

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EU Product Safety Package 
On 2 December 2013 the Lithuanian EU Council Presidency presented a progress report on Consumer Product Safety and Market Surveillance Package to the Competitiveness Council.  At this stage it is clear that the first informal trialogue negotiations between the Council, Commission and EU Parliament will be held next year during the Greek Council Presidency.

Concerning the Consumer Product Safety Regulation, the most important issues during the negotiations will be the country of origin marking, the “EU Safety Tested” marking, obligations for economic operators and penalties which are linked with the negotiations on the Market Surveillance Regulation. Other than the question of penalties, the introduction of a Pan-European Injuries Database, functioning of RAPEX and ICSMS databases, as well as the activities and evaluation of market surveillance authorities will be the most contentious issues in the Market Surveillance Regulation.

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EU to tackle Youth Unemployment
The European Commission has published a memo with details on the EU measures taken so far to tackle youth unemployment. With 5.6 million young people unemployed in the EU-28 area in September 2013, more than one in five young Europeans on the labour market cannot find a job (one in two in Greece and Spain). The memo, in particular, focuses on the European Social Fund and the implementation of the Youth Guarantee and coincided with a High-level Conference on Youth Employment in Europe, the second EU summit on youth employment to take place in four months. At the first summit, leaders reaffirmed their commitment to devote at least €6 billion over the next two years to create a “youth job guarantee” that will ensure that no-one under 25 spends more than four months without work or training.

EU Commission Memo
EU Youth Guarantee Strategy

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WTO Success in Bali

At the 9th Ministerial Conference of the World Trade Organisation (WTO) in Bali on 3-6 December trade ministers from 159 countries reached an agreement on a series of issues that could constitute a first step towards concluding the Doha Round (the Doha Development Agenda – DDA). “The WTO is back on track. Today’s deal will rebuild business trust and confidence in the multilateral trading system. Ten years after the failure of Cancún, the WTO has finally demonstrated its capacity to deliver,” commented Ralph Kamphöner, EuroCommerce Director for International Trade and Adviser to the European Commission in Bali.

The simplification and harmonisation of global customs procedures is a vital building block for economic growth and development. Trade Facilitation is the simplest, most regulatory efficient way to recover economic performance and generate wealth creation for the good of all societies, regardless of location or region. The Agreement on Trade Facilitation offers a key and significant boost for the global trading community during these critical economic times. It also helps poorer countries in achieving their customs reforms.

Quoted in the Financial Times, Christian Verschueren, Director-General of Euro-Commerce said: “This is a good day for Europe and the world economy. We will now see quicker and more simplified border procedures, acting as a catalyst for trade, growth and jobs. The Trade Facilitation Agreement is a win-win-win deal.”

Ministerial Declaration
Agreement on Trade Facilitation

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EU to start accession talks with Serbia

On 17 December, the EU Member States have given their green light to launch accession talks with Serbia in reward for its change in its foreign-policy earlier this year when it normalised relations with Kosovo. Swedish Foreign Minister Carl Bildt tweeted that this was an important development for the entire region. EU Foreign Affairs Council chair and Lithuanian Foreign Minister Linas Linkevicius added that an accession conference will be held soon. It is likely that first talks will already be held in January 2014. EU Enlargement Commissioenr Stefan Fuele stated that the upcoming Greek EU presidency plans to organise the first Serbian accession conference on 21 January.

Serbia, along with five EU countries, does not recognise Kosovo, which declared independence in 2007. But Kosovar and Serb leaders agreed a landmark deal in April to co-operate on day-to-day issues, including to dismantle paramilitary groups in Kosovar Serb enclaves. Fuele noted that the EU is also in talks with Kosovo on an association agreement – a precursor to future accession.

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EU – Turkey accession talks restarted

On 16 December EU Commissioner for Home Affairs Cecilia Malmstrom and Turkish foreign minister Ahmet Davutoglu signed the “re-admission” treaty at a ceremony in Ankara. When it is ratified by both sides, it will oblige Turkey to take back irregular migrants who enter the EU from its territory. During the meeting Malmstrom and Davutoglu also launched talks on future visa-free travel, which the EU had tied to the re-admission deal. Malmstrom noted that relations took “a significant step forward.” The re-admission ceremony comes one month after the EU and Turkey restarted accession talks following a three-and-a-half-year break.

Albeit the progress, analysts are less optimistic about the re-launching of accession talks as both the EU and Turkey will internally be dealing with major political changes throughout 2014, with the European Parliament elections and the Turkish presidential elections coming up. 

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EVENTS

The new rules on Distance Selling in France and Belgium
   19 December 2013, Brussels (University of Leuven Seminar)
UK DSA Annual Conference
   15 May 2014, Brussels To top      

SELDIA SERVICE PROVIDERS

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Troy Dooly is recognized internationally as an influencer in the areas of personal branding, leadership development, marketing campaigns, organizational expansion, and corporate launch strategies. Dooly is a speaker, results coach, and radio host. He is a founding member, show host (Beachside CEO) and News Director of the Home Business Radio Network. He is a founding member, and currently serves on the Board of the Association of Network Marketing Professionals