Seldia Newsletter October 2013

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October 2013
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Seldia Annual Round Table 2013 

On 2 October 2013 the third edition of Seldia’s Annual Round Table Conference took place in Brussels and enjoyed an excellent turnout with over 150 participants attending. In his opening speech, Seldia Chairman and  CEO of Oriflame Magnus Brännström underlined the fact that direct selling was one of the few sectors in Europe that was continuously growing and that it is important to both recognize and further promote direct selling as being “a major force in Europe”. As a first speaker, WfDSA Executive Director Tamuna Gabilaia presented the objectives of the WfDSA and its new “Ethics Toolkit”, praised cooperation with Seldia and handed Seldia Executive Director Maurits Bruggink a trophy to congratulate for the European association’s 45 year anniversary. In a short presentation, Executive Director of the Brazilian DSA Roberta Kuruzu promoted the WfDSA World Congress which will take place in November 2014 in Brazil. Christian Verschueren, Director General of EuroCommerce, the European association for retail, wholesale and international trade gave a captivating keynote speech at which he highlighted the increasing importance of consumer trust and the need to see the future of retail within the greater context of EU single market dynamics. 

One of the the highlights of the Round Table Conference were the two panel discussions. The first one was the CEO’s panel at which Magnus Brännström (CEO, Oriflame), Jens Abend (CEO, LR Health & Beauty), Ben Woodward (Managing Director Europe, Nikken Europe) and Peter Strydom (Managing Director EMEA, Amway) discussed the future of the industry. All panelists highlighted the importance of social media and the need to have diverse approaches to the heterogenous markets within Europe. Giving various key insights into their companies’ the panelists agreed that the need for diversified approaches as well as investing into the digitalization of their businesses are key approaches for the future. 

The second panel consisted of Joseph Mariano (US DSA President), Michael Meissner (Amway Europe’s Vice-President Corporate Affairs) and Paul Baeyaert (CEO of Weber Shandwick Belgium) whom debated the importance of “positive communication and transforming negative issues into positive ones.” Joe Mariano also articulated the importance of unity within the industry when referring to the Bill Ackman attacks, as he stated that “An attack on one member is an attack on the entire industry.” As someone from outside the industry Paul Baeyaert gave interesting suggestions when he stressed the crucial need of being transparent. 

Seldia would like to thank all those who attended and in doing so contributed in making the event another success. We look forward in seeing you again next year. 

For photos of the conference click here.

Industry News
2013 Seldia Astra Awards Winners

 
The winners of the 2013 Seldia Astra Awards are:

Best Company Award :    Amway
Best DSA Award:               Hellenic Direct Selling Association
Personality of the Year:    Małgorzata Handzlik, MEP
Hall of Fame Award:         Robert and Jonas af Jochnick, founders of Oriflame

With special guests presenting the awards: Joe Mariano (President US DSA), Ambassador Andrea Papastavrou (Deputy Permanent Representative of Greece to the EU) and Ambassador Jan Olsson (Deputy Permanent Representative of Sweden to the EU).

For photos of the Awards Dinner on 1 October click here.
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Polish DSA Annual Conference
On 17 October the Polish DSA (PSSB) celebrated the “2nd Polish Direct Selling Day” under the motto „Building Relationships”. The conference was attended by some 170 people, amongst them policymakers, academics, representatives of the business community, trade organizations and the direct selling industry. The Day was held under the auspices of Poland’s deputy prime minister and minister of economy Janusz Piechociński.

After the opening address of the PSSB Chairwoman Ewa Kudlińska-Pyrz, the gathering was addressed by the deputy minister of economy Jerzy Witold Pietrewicz who emphasized the importance of the branch to the national economy, also in the area of promoting entrepreneurship. His address was followed by a videotaped message from the Polish Member of the European Parliament Małgorzata Handzlik.

The key presentation was made by Professor Janusz Czapiński, a renowned social psychologist from Warsaw University, who is best recognized for his national study entitled „Social Diagnosis”, conducted on some 13 thousand Polish households ever since the early 1990s. The speaker focused on the significance of the so called soft capital – social confidence, team and cooperation spirit, close and lasting human relations – for economic development, and argued that the absence of this kind of capital, or ignoring its true role by decision makers, may put the country’s future development in jeopardy.

Following this captivating presentation was an expert panel that focused on explaining the challenges of micro-enterprises. The conference also included the ceremony of presenting prizes to the winners of the latest edition of the Association’s annual competition for students.T he event was also the occasion to promote the latest PSSB initiative to collect 100 thousand signatures for a petition to the Polish parliament to officially recognize 17 October as the National Direct Selling Day.

 
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Official launch of the Moroccan DSA  
On 22 October 2013 the Moroccan DSA  has been officially launched in Casablanca through an official press conference. In March this year the Managers of Forever Living Products , Avon and Oriflame had gathered in Rabat to sign the articles of the newly established Moroccan Direct Selling Association (Association Marocaine de Vente Directe). 

Beauty and personal care products currently account for the majority of direct selling sales in Morocco and the category is expected to further increase in the different regions of Morocco. Morocco proves to be an excellent market for Seldia member companies, many of whom are currently expanding their businesses there as well as launching new product lines. According to EuroMonitor, it is expected that “Morocco’s leading direct selling companies will rely on their capacity to reach a more significant base of consumers than store-based retailing channels as well as their more flexible payment systems.”

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MEP Handzlik EP Question on direct selling bans  
Member of the European Parliament Malgorzata Handzlik submitted a European Parliament Question to raise awareness on the issue of national bans on direct selling. EU Commission Vice President Viviane Reding, in her role as Commissioner for Justice, is expected to provide an answer to Ms. Handzlik’s question before the end of this year. Ms. Handzlik’s question refers specifically to the improper implementation of the Unfair Commercial Practices Directive in member states, one of Seldia’s main advocacy issues. According to the UCPD – if correctly implemented – bans such as the one on the direct selling of cosmetics in Austria are illegal by EU law and cannot be upheld.

Parliamentary questions are questions addressed by Members of the European Parliament to other European Union Institutions and bodies. They are a direct form of parliamentary scrutiny of other EU institutions and bodies.

The full question can be found here.

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Seldia 2012-13 Annual Report now available   

The Seldia Annual Report 2012-2013 is now available for download or in hard copy upon request.

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EU AT A GLANCE

European Parliament Draft Report on UCPD 

At the end of September, MEP Robert Rochefort (French, liberal) published the European Parliament draft report on the implementation of the Unfair Commercial Practices directive. Seldia welcomes this report which calls for Member States to fully comply with the UCPD, urging the European Commission to start legal proceedings against those Member States that have not fully or incorrectly transposed the UCPD into national law. The report also welcomes the European Commission’s intention to update the UCPD Guidelines in the coming months. Seldia also welcomes reference made to the importance for member states to implement the directive on alternative dispute resolution. 

However, Seldia and other actors of the retail sector oppose Rochefort’s call on the European Commission to propose a law on collective redress.

The draft report can be viewed here.

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Data Protection: EU Parliament moves ahead

On 21 October, the European Parliament’s Civil Liberties Committee voted in favor of German Green MEP Jan Philipp Albrecht’s report on the Data Protection reform proposal. Responding to mass surveillance cases, MEPs inserted stronger safeguards for data transfers to non-EU countries. They also inserted an explicit consent requirement, a right to erasure, and bigger fines for firms that break the rules. The vote is also the closure of this lengthy process and is important as it proves to industry and other institutions that the European Parliament can reach a common agreement. After having received over 3000 amendments to the initial report, MEPs were able to work out a series of compromise amendments.

The current data protection directive dates from 1995, before the Internet came into widespread use, and does not cover data processed for law enforcement purposes. The new rules update existing data protection law principles to take account of the challenges posed by new information technologies used in the twenty first century. The voted report means that the Parliament now has a clear mandate to start negotiations with the different EU governments represented in the Council. While it is a step forward for the Parliament, it is speculated that negotiations within the Council will not conclude before the end of the EU Parliament’s term next year as certain member states, amongst them the UK, are blocking negotiations. 

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Consultation on Consumer Protection Regulation
On 14 October the European Commission has opened a public stakeholder consultation on the review of the Consumer Protection Regulation. With the CPC regulation, the EU developed a solid set of rules on the consumers’ economic interests to provide a level playing field to companies and consumers. The Consumer Protection Cooperation network was set up to allow national enforcement authorities to work closely together to ensure compliance with these rules and tackle cross-border infringement cases. The rules and conditions for the cooperation between the national authorities and the Commission in this network were adopted five years ago and are set out in the Consumer Protection Cooperation (CPC) Regulation (2006/2004/EC). 

The CPC Regulation provides mechanisms for mutual assistance requests to address concrete breaches of EU legislation involving at least two EU countries. Within this scheme, a national authority can use its administrative powers to deal with infringements perpetrated by a company located in its territory but harming the collective interest of consumers in another EU country. Issues and infringement cases dealt with by the CPC relate to a significant number of EU Directives and Regulations, and may cover matters including: unfair or misleading commercial practices, unfair contract terms, consumers’ rights to information, guarantee rights and specific rights in cases of distance selling or e-commerce. Each year the authorities in the CPC network conduct a coordinated screening of websites (‘sweep’) in a given sector to check their compliance with EU consumer laws and follow-up on possible infringements.

This consultation is open until January 2014 and is addressed at stakeholders and all those with an interest in enforcement of consumer rights across national borders within the Single Market, including businesses and their associations. Seldia is currently preparing an answer on behalf of the Direct Selling industry.

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ECJ ruling on notion of directed activity 

On 17 October 2013 the Court of Justice of the European Union (CJEU) adopted a new ruling interpreting the notion of directed activity foreseen in the Brussels I regulation on court jurisdiction. This notion is important to determine the competent jurisdiction in cases where one of the parties is a consumer.

In earlier judgements the Court of Justice had established that the criteria for assessing when the traders’ website addresses an activity to another member state (Alpenhof case) and later it added that for a consumer to be able to sue a foreign trader before the national courts, it is not necessary that the contract at issue was concluded at a distance (Mulheitner case).In today’s case, Mr Emrek, who resides in Saarbrücken (Germany) and who learned through acquaintances (not via the internet) of Mr Sabronovic’s business (in Spicheren France) went there and purchased a second-hand motor vehicle. Subsequently, Mr Emrek made claims against Mr Sabronovic under the warranty before the Amtsgericht (District Court) Saarbrücken. Mr Emrek took the view that, under Regulation No 44/2001, that court had jurisdiction to hear such an action.

This issue was later submitted to the CJEU by the German appeal court. The CJEU replies that Article 15(1)(c) of the Brussels I regulation does not require the existence of a causal link between the means employed to direct the commercial or professional activity to the Member State of the consumer’s domicile, namely an internet site, and the conclusion of the contract with that consumer.

To see the ECJ Press Release of 17 October click here.

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Important Reminder: SEPA payments as of 2014
All Seldia corporate members and direct selling companies active in Europe need to be aware that as of 1 February 2014 within the euro area have to adapt to the SEPA payments system. The European Central Bank has warned that many payment recipiants are not aware and have not yet completed the necessary steps and that late migration risks that payments may not be handled smoothly. The ECB message can be found here

The EU Commission has asked EuroCommerce, Seldia and other retail associations to make sure that all their members-associations take steps to be ready for migration to SEPA payments and that all national associations pass this message to their constituencies.

Merchants need not do this on their own: your banks will help. We therefore ask you to tell your members that they MUST contact their banks to find out what specifically they need to do for their business.

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News from ECC-Net  
As of mid-October, the European Consumer Centre (ECC-Net) lists both the UK and the Irish Direct Selling Associations as official Alternative Dispute Resolution (ADR) mechanisms on its website. A Seldia delegation which included the Irish DSA Code administrator visited ECC-Net Ireland in September 2012 to explain how Seldia and its member associations would adapt to the recently adopted EU ADR directive. 

On 15 October ECC-Net also published a report entitled “Can I trust the trust mark?”. The report examines how online trust mark schemes achieve their objective of guaranteeing that their members offer good commercial practices, security and privacy for consumers. The ECC-Net analysed, from a consumer perspective, detailed characteristics of the 54 trust marks schemes currently existing in the EU. ECC-Net recommends that trustmark operators develop pan-European best practices and provide consumers with more information on their schemes.

The ECC-Net report can be seen here.

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IMCO votes in favor of Origin Labeling

The EU Parliament’s Internal Market and Consumer Affairs Committee has adopted the draft reports on the Consumer Product Safety Regulation of Christel Schaldemose (DK, S&D) and on the Market Surveillance on Products Regulation of Sirpa Pietikäinen (FI, EPP). The roles and obligations of economic operators are now better defined and market surveillance will be better streamlined  in the EU. Both reports will increase trust and cooperation in the supply chain, including a provision for isolated cases. 

Unfortunately the committee also adopted some provisions opposed by us, such as mandatory origin labelling. The next step is a Council meeting on 25 October to decide the starting of trialogue negotiations.

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EP initative report on SOLVIT

The Commission recently published recommendations for SOLVIT, an on-line, cross-border, problem-solving mechanism aiming to help consumers and business navigate the Single Market. Morten Løkkegaard (DK, ALDE) will draft an own-initiative report on this, specifically looking at how SOLVIT is functioning, who uses it (consumers or businesses), and the awareness of SOLVIT. It will also look at if Member States do what they have promised, i.e. to work together to solve (without legal proceedings) problems caused by the misapplication of Internal Market law by public authorities. 
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EU e-signature proposal
The European Parliament’s Industry, Research and Energy Committee endorsed a draft EU law which will require member states to recognize each other’s electronic identification systems and thus simplify access, signing and certification of documents. The law is intended to stimulate the digital economy while enhancing the trustworthiness and security of cross-border trade. This would be the first EU law to require EU member states to recognise and accept electronic identifications issued in other member states.

The proposal would require member states to mutually recognise each other’s national electronic identification systems, provided that these systems have been reported to the European Commission. Existing national systems would not have to change, but would be classified according to their level of security. The Parliament will start negotiations with the Council, aiming at a first reading agreement. Once the EU Council has adopted its position, both the Council and the Parliament will aim at a first reading agreement which is expected to take place in November.  
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2nd Round of TTIP negotiations re-scheduled
The second round of TTIP negotiations scheduled for 7-11 October in Brussels was set to focus on trade rules and the regulatory component of the TTIP that would feed into a political review in January 2014. However, due to the 16-day US government shutdown when congress failed to agree on a budget, the US Administration has not been able to send to Brussels officials from USTR and US Government agencies to maintain the planned session of talks. The EU and the US counterparts will be looking soon for further occasions for engagement, including negotiation rounds.

The initiative of a transatlantic agreement is based on the recommendations of the EU-US High Level Working Group on Jobs and Growth that steered the deliberations on the future EU-US relations since late 2011. According to an independent study by the Centre for Economic Policy Research, London, an ambitious and comprehensive trans-Atlantic trade and investment partnership could bring the EU economic gains of €119 billion a year once the agreement is fully implemented.

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EU-Canada Trade Agreement
On 18 October 2013, EU Commission President José Manuel Barroso and Canadian Prime Minister Stephen Harper reached a political agreement on the key elements of a Comprehensive Economic and Trade Agreement (CETA). The trade agreement is worth over €25 billion per year, in a deal seen by Brussels as the forerunner to a successful trade accord with the US. It will also be the first free trade agreement between the European Union and a G8 country. It will remove over 99% of tariffs between the two economies and create sizeable new market access opportunities in services and investment. Based on the political agreement, technical negotiations will have to be completed so as to finalise the legal text of the agreement.

In 2012 Canada was the EU’s 12th most important trading partner whereas the EU is Canada’s second-largest trading partner, after the United States. In 2012, the value of bilateral trade in goods between the EU and Canada was €61.8 billion.

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EU Trade negotiations in Southern Meditteranean
The EU has completed so far two rounds of negotiations for a Deep and Comprehensive Free Trade Agreement (DCFTA) with Morocco and the next round is expected to take place in late November 2013. This DCFTA will extend significantly beyond the scope of the existing Association Agreement to include trade in services, government procurement, competition, intellectual property rights, investment protection and the gradual integration of the Moroccan economy into the EU single market, for example in areas like industrial standards and technical regulations or sanitary and phytosanitary measures. The main objective of the DCFTA is to bring Moroccan legislation closer to EU legislation in trade-related areas. The current framework for EU-Morocco trade relations is the Association Agreement between the EU and Morocco which entered into force 1st March 2000, and provided for a Free Trade Area.

Morocco is the first Mediterranean country to negotiate a comprehensive trade agreement with the EU. The Commission has also a mandate to start a similar process with Tunisia, Egypt and Jordan.
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EVENTS

SME Intergroup Breakfast: EU Retail Action Plan
    6 November 2013, European Parliament, Brussels
Entrepreneurs & Consumers – Steps Towards each other
    13-14 November 2013, Moscow (Russian DSA & CONFOP)
2013 SME Assembly in Lithuania
    25-26 November 2013, Vilnius (EU Commission)
EuroCommerce 20th Anniversary Dinner
    25 November 2013, BrusselsTo top      

 

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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