OVERVIEW OF REGULATIONS RELATIVE TO SETTING UP RETAIL SHOPS IN THE EUROPEAN UNION Bertrand Boullé
Commercial town planning bears the mark of considerable transformations in the commercial system and in the modes of distribution that Europe has gone through for more than three decades. The deep change in the respective place of the different forms of businesses on the one hand, and the impact of these changes on the way cities work on the other, have led in almost all the countries that are today members of the European Union to a strengthening of the regulations relative to the setting up of retail shops. One should draw a distinction between two great system of regulation on the setting up of retail shops within the European Union. If in all the countries the creation of commercial equipment is governed by the delivery of the planning permission, some countries have set up a legislation of an economic order, controlling the commercial offer with the aim of preserving a balanced development in the different forms of businesses. Also, most of the “monistic” systems that handle the setting up of retail shops only through town planning law have integrated specific commercial equipment provisions in the rules governing town and country planning. Without claiming to be exhaustive, an overview of the legislation and regulations relative to the setting up of retail shops offers a useful and new view in this field. 1. COUNTRIES GOVERNING THE SETTING UP OF RETAIL SHOPS THROUGH A SPECIFIC LEGISLATION Six member countries of the European Union have a legislation of an economic order subjecting the setting up of retail shops to the delivery of a specific authorisation, different from the planning permission. These authorisations are required starting from a certain threshold in terms of area. They are granted with regard to social and economic criteria mainly relating to the preservation of competition, particularly in terms of balance between the different forms of businesses, to the satisfaction of consumer needs, and in the impact on jobs. They also take into account the territorial and environmental impact of the setting up. Belgium Law dated 29 June 1975 and royal application decrees. The delivery of a “Social and Economic Permission” is compulsory for any creation (new construction or exploitation of a building that has no assigned business activities), extension, or important modification in the nature of the commercial activity of a point of retail sales the gross built area of which or the net commercial area exceeds the following thresholds: Zone 1 (urban) Outside zone 1 Overall area 1.500 sqm 600 sqm Sales area 1.000 sqm 400 sqm
The permission is delivered by the College of Burgomasters and Deputy Burgomasters after compulsory and detailed opinion from the Social-Economic Committee on distribution (federal civil servants) and consultative opinion from the provincial Commission on distribution (social-professional representation). Appeal is open to the applicant and to a member of the national distribution Commission, before the interdepartmental Committee on distribution. A draft reform of the law dated 29 June 1975 is currently under examination. Spain National law dated 15 January 1996 and regional legislation Obtaining the “Commercial Licence” is compulsory for the setting up of “commercial super/hypermarkets”, defined according to thresholds in terms of sales areas set by the legislation of the autonomous Communities. In each autonomous Community, the thresholds in terms of sales areas vary according to the population thresholds: They range from 300 sq.m. to 2500 sq.m. The commercial licence is delivered by government Council of the autonomous Community or the
department competent in the field of competition, after compulsory opinion of the competition defence Court and the village/town where the shop is set up. Most of the autonomous Communities have set up specific commissions to examine applications, associating representatives from the administration, professionals and consumers. Appeals can be field before the Higher Court of Justice. France Royer Law dated 27 December 1973, modified by the Doubin Law (1990), the Sapin Law (1993) and the Raffarin Law dated 5 July 1996. The delivery of an “authorisation of commercial exploitation” is compulsory for any creation, extension, reopening after two years of inactivity of a retail store the sales area of which reaches the threshold of 300 sq.m., as well as for the modification of the nature of the commercial activity of a retail store of more than 2000 sq.m. The authorisation is delivered by the departmental Commission on commercial equipment (called C.D.E.C.), made up of six voting members (political representatives, professionals and consumers) united under the chairmanship of the Prefect. Appeal is open to the Prefect, to the applicant, to two members of the C.D.E.C. (of which at least one of whom is an elected official). The appeal is filed before the national Commission on commercial equipment. The legislation also applies the hotels with more than 30 rooms (50 in the Ile-de-France region) and to cinemas with more than 800 seats. Italy Legislative decree n° 114 of 31 March 1998 modifying the Law dated 11 June 1971 and regional legislation. Any creation, extension, or transfer of a “supermarket or hyper-market” is subject to the delivery of a commercial equipment authorisation. These three categories of commercial equipment are defined in the statutory order 114/98 according to the sales area and the population: Corner shops Supermarkets Hypermarkets Pop up 10.000 150 sq.m. 1.500 sq.m. 15.000 sq.m. Pop. over 10.000 250 sq.m. 2.500 sq.m. 25.000 sq.m.
The authorisation relative to supermarket projects is delivered by the village/town after consulting consumer and retailer associations. The authorisation relative hypermarket projects is delivered by the Services Commission including one representative from the town, one from the province and one from the region. The favourable opinion of the region is required. The decision is made by a majority vote at a public meeting. Corner shops are subject to a compulsory prior set-up notification to the town/city authorities. Appeals against decisions are filed before administrative courts. Luxembourg Law dated 28 December 1988 modified by the Law dated 4 November 1997. A “setting-up authorisation” is compulsory for any setting-up (creation or modification of the activity) or extension of a retail shop the sales area of which exceeds the single threshold of 400 sq.m. The authorisation is delivered by the minister of the Middle Classes after examination and opinion of the Commission on commercial equipment made up of the representatives from concerned ministries, from consular chambers, unions and management and consumers. Also, the Law dated 4 November 1997 has suspended for five years all the authorisations concerning the setting up of shops meeting the following criteria: All retail businesses Non specialised businesses Sales area > 10.000 sq.m. Sales area dedicated to food > 4.000 sq.m. Sales area dedicated to ready-to-wear > 3.000 sq.m. Sales area dedicated to building and home equipment > 4.000 sq.m.
Appeals against decisions of the minister are open to applicants and the representatives of socialprofessional associations (administrative litigation).
Portugal Statutory order n° 218 of 20 August 1997 modifying the Statutory order f 1995 and Law of 1992. The delivery of an “setting-up authorisation” is compulsory for “large commercial units”, defined in accordance with sales area thresholds of the unit as well as in accordance with the combined sales of the group or company: Type of shop Food or mixed Non food Sales area of the shops 3.000 sq.m 4.000 sq.m. Combined sales area of the group 15.000 sq.m. 20.000 sq.m.
The application for an authorisation is filed with the general Directorate on Competition and Consumption (called D.G.C.C.). the authorisation is delivered by the ministry of the Economy. It cannot be granted when the market share of the group in the continental territory exceeds 15%. The opening of the retail shop is subject to an “authorisation of functioning”, delivered by the D.G.C.C. which sets out to check that the conditions on which the setting-up authorisation was based have been met. The legislation also applies to wholesale trade.
2. THE “MONISTIC” COUNTRIES
In these nine other EU countries, setting up retail stores is not subjected to any specific legislation. It is only subjected to the legislation applicable in the field of town and country planning and the environment. Obtaining a planning permission depends on a local decision. However, in most of these countries, the legislation relative to town and country planning – national or regional – contains specific provisions that frame, steer or direct local authorities in the exercise of their prerogatives in the face of shop setting-up of special setting-up authorisation procedures depending on the type of retail shops and of their areas, or yet of restrictive dispositions. These measures are motivated in particular by paying special attention to the economic development of town/city centres. Germany Federal law on town and country planning of 1968 and amendments federal Decree dated 23 January 1990 relative to the land use. Legislation of the Lander. Federal law imposes a: Location in specific zones of shops the sales area of which exceeds 700 sq.m.; A compulsory setting-up impact studies for shops tha salea area of which exceeds 1200 sq.m. Regional legislation and local plans may contain a detailed description of the conditions for settingup retail shops (for example: list of products typical of town/city centres or ranges of goods accepted in hypermarkets set up in the periphery) in order, in particular, to promote the development of town/city centres. Austria Law on town and country planning. Decrees of the Minister of the Economy of 1998 and 2001. Permissions are granted after an evaluation of nuisances. Permissions relative to shops the sales area of which exceeds 800 sq.m. (or 1000 sq.m. in gross area) must be subject to an evaluation of the impact in the supply of corner shops and the impact on employment. Denmark Outline Law on town and country planning dated 28 June 1999 modified in June 2002. Local authorities are controlled as concerns the setting up of hypermarkets. Permissions relative to shops the sales area of which exceeds 1500 sq.m. for specialist shops and 3000 sq.m. for multi-specialist stores are subject to a compulsory opinion on the part of the regional authority competent in the field of town and country planning. Finland
Law on town and country planning dated 19 January 1999 (Land Use and Building Act). This law introduces greater control over the setting up of hypermarkets. The setting up of shops the area of which exceeds 2000 sq.m. is possible only within a zone specific to this type of setting-up. Greece Law on town and country planning. Town and country planning code. The town and country planning code provides a limit of 600 sq.m. and a system of dispensations for “ special commercial equipment”. The Council establishes these dispensations on town and country planning and the environment of the region. Also, setting-up projects above 5000 sq.m. are subject to a specific procedure including a study of the impact on employment and the environment. They must be located in controlled urban settlement zones. Permissions are granted either by the regulating plan body in towns/cities that have such a plan, or by the departmental Council on town and country planning and the environment. Athens and Salonika have a “special ‘planning permission” for hypermarkets: an installation permit delivered by the regulating plan bodies. United Kingdom Town and Country Planning Act of 1990 . Policy Planning Guidance Notes n° 6 Town Centres and Retail Development of 1996. Local authorities are directed by the definition of objectives in the field of commercial town planning set by competent minister. The note on town centres and the setting up of shops (PPGN 6/1996) underscores the importance that needs to be given to the objectives in terms of vitality and viability of town centres, of accessibility of shop groupings and of environment protection in the definition of preferential zones for setting up shops. Any new setting up of a retail shop the area of which exceeds 2500 sq.m. should be subject to an evaluation with respect to these objectives. Finally, any setting-up project the overall area of which is above 10000 sq.m. needs to be notified to the minister who reserves the right to start a so-called “call-in power” procedure, that is to say to handle the permission application directly. Ireland Planning and Development Act 2000. Retail Planning Guidelines dated 2 January 2001. Local authorities are directed by way of ministerial notes detailing the objectives to be integrated to local planning. The note dated 2 January 2001 recommends planning in favour of the commercial vitality of town centres and of the maintaining of activities in the rural areas and lists a series of indications, even obligations, to be followed by type of shop set-up, in particular: Maximum threshold for large convenience shop and food shops: 3500 sq.m. in sales area in the Greater Dublin region and 3000 sq.m. in sales area in the lost of the country; Presumption against the creation of new regional shopping centres (i.e. above 50000 sq.m.). The Netherlands Law on town and country planning of 1965 and amendments. Letters of the Government to the Lower Chamber dated July 1993 (PVD) and July 1995 (GDV). The policies described below are put in question as a result of an evaluation report. Published in 2000, and a profound reform in the law on town and country planning is about to be adopted (see the Fifth National Spatial Planning Document). The government intervenes in order to direct the competence of towns in the field of commercial town planning by means of political directives. Two major restrictive polices are in force: Policy relative to the setting-up of retail shops in outlying areas (PDV) recommending to towns/cities to avoid astablishing shops on their periphery, with the exception, on the one hand, of furniture and light building material shops if they cannot be set up in existing structures, and on the other of the sectors of activities for which this type of setting-up is a necessity. Policy relative to the large-scale setting up of retail shops (GDV) that authorises in 13 urban agglomerations (“urban crossroads”) the setting up of supermarkets, in grouped forms, without limitation linked to the types of activities, but the sales area of which is at least 1500 sq.m. Sweden
Planning and Building Act of 1987 No special provisions relative to retail shops other than local planning. Without having necessarily decided to harmonise their regulations in the field of commercial equipment, today’s member countries of the European Union have for a long time unanimously considered that they had to control or restrict what is commonly called the development of volume retailing. To preserve, by all available means, the development of city-centre shop activities, such is the common objective being sought through the statutory principles put in place in each country. Some countries – a minority – have opted for an independent legislation preliminary to the planning permission procedure. Originally founded on an economic and political mode of regulation, this legislation tends today to have an increasingly more legal nature. This is now in particular the case of France. For the great majority of countries, it is solely through the common law of town and country planning that commercial equipment creation projects are analysed. Confronted with these European statutory issues, distributors and professionals in the shopping centre industry – the players of city centres and their periphery – have learned to adapt to the specific features of each country and have finally admitted their principle, often however to the detriment of the prescribed time limits.