Small business rules… in Europe

If big business thinks changes proposed by Labor to prevent price fixing are draconian, they should cast their eyes to some countries in Europe.

The Economist has taken a look this week at countries in Europe that have bent over backwards to accommodate small business with their trading laws. For example at around Christmas time, a number of European countries have a pre-sales black out on advertising discounts.

In France for example, sales by law can only begin after 9 January. In Belgium not only are sales banned before 3 January, but under “pre-sales” rules, for six weeks beforehand retailers cannot announce price reductions.

During the twice yearly pre-sales blackouts, a hundred inspectors from the Belgium Ministry of Economic Affairs scour the streets looking for window stickers, advertisements or price tags that even hint at discounts.

Inspectors apparently receive many tip-offs from rival shopkeepers denouncing each other. Courts are busy with lawyers arguing about what an extremely reduced profit margin means, as this is banned along with any selling below cost.

According to The Economist, the pre-sales black outs was dreamt up in the 1980s – not by leftie socialists but by centro-right politicians fearful that small business could not compete if big chains were allowed to go after bargain hunters in a free-for-all.

But even though the Belgians, like much of Europe, are attached to their town centres filled with small shops, there are moves afoot to change the trade restrictions. Get ready for more big business versus small business battles in Europe this year.