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Overview of restrictive retail regulation in Europe compared to that in Croatia

The sector of retailing, although usually quite competitive, has a significant restrictive regulation imposed to it. Various authors and researchers approach regulation from diverse angles, but the common denominator to the most is that restrictive regulation in retailing is most commonly related to market access and retail operations. The purpose of this paper is to explore what are the main areas or forms of retail regulation in selected European countries, how their retailing companies react to ever changing regulation, and to compare the findings with the Croatian retailing market. The focus is on one of the most controversial areas of retail regulation: below cost selling or in competition law terms - predatory pricing. Accordingly, the proposition autors seek to analyse is that regulation of below cost selling in Croatia had no influence on retail development processes. However as of 2010, the new competition regulation might influence retailers’ selling below cost/predatory pricing behavior. To find sufficient arguments that would corroborate or challenge the above proposition, extensive literature overview and analysis was conducted. All relevant journal articles, internet resources, as well as original national laws were consulted. The analysis results indicate that levels of regulation vary between West European countries. France has one of the most restrictive systems, in 2006 Ireland revoked acts prohibiting below cost selling, but Germany in 2007 and Croatia in 2008 introduced restrictions to below cost selling in their retail regulation. The findings could be used to identify European best practices and benchmark Croatian retail regulation against them, pointing at the potential regulation alterations that would contribute to further retail development in Croatia.

retail regulation; below cost selling; predatory pricing; Europe; Croatia

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