EU: Single market – tackling unjustified territorial supply constraints 

 

Territorial supply constraints are limitations imposed by certain large manufacturers that make it very difficult or impossible for retailers to buy products in one EU country and resell them in another. They fragment the single market, limit consumer choice and contribute to significant price differences across the EU for daily consumer goods. 

The single market strategy adopted in May 2025 announced tools to address such practices beyond situations captured by competition law. Now, the EU Commission is seeking comments on tackling unjustified territorial supply constraints. 

This initiative seeks to address unjustified territorial supply constraints imposed by manufacturers of everyday consumer goods. Such constraints can make it difficult—or even impossible—for retailers and wholesalers to source products from the Member State of their choice, instead requiring them to purchase from specific countries designated by the manufacturer. As a result, businesses may be unable to access more competitive wholesale prices, limiting their ability to offer consumers a wider product range and lower prices. 

A study on territorial supply constraints in the EU retail sector identified significant variations in wholesale prices for certain food and non-food consumer goods. These differences cannot be fully explained by factors such as taxation (including VAT) or production costs, including labour, raw materials, and logistics. The impact is particularly pronounced in smaller Member States located near larger markets where prices tend to be lower. Similar findings have emerged from national studies examining cross-border price differences for branded products. 

In some cases, product or price differentiation may be justified—for example, to comply with national regulatory requirements such as labelling rules, or as part of a company’s short-term commercial strategy, such as introducing a new product. 

Competition law can effectively address unjustified territorial supply constraints when they arise from anti-competitive agreements or unilateral conduct by companies holding a dominant market position. The European Commission has previously imposed substantial fines in such cases, including against Mondelez International in 2024 for restricting cross-border trade in chocolate, biscuits, and coffee, and against Anheuser-Busch InBev in 2019 for limiting cross-border beer sales. 

However, many similar practices fall outside the scope of competition law, particularly when they involve unilateral actions by companies that do not hold a dominant position. Investigations and fact-finding by the Commission, including in the context of the Single Market Enforcement Taskforce, have identified common forms of territorial supply constraints such as differentiated packaging and labelling, variations in wholesale pricing, and refusals to supply. 

This initiative is therefore intended to address unjustified territorial supply constraints that are not currently captured by existing competition law frameworks.