Last 12th September, the European Commission presented a proposal for a Regulation to combat late payment in commercial transactions. The proposal will replace the current Directive by, among other changes, imposing a strict payment cap of 30 days between all Business-to-Business (B2B) transactions without flexibility or exception.
EIBF is the voice of booksellers in the European Union and globally. EIBF’s members are national Booksellers Associations, which represent all kinds of book retailers, a majority of those being small and medium-sized independent and family-owned bookshops. As representatives of SME retailers, EIBF welcomes the proposal and its aim to address what is a serious issue for many businesses across Europe: late or even no payment for their services.
However, EIBF is concerned by its likely negative impact on the sector and calls for the recognition of essential flexible payment terms for certain trade sectors working with slow-moving and seasonal goods, particularly the book sector. EIBF stresses that this proposal should not come at the expense of certain SMEs and their sectorial business models, where long payments terms are not late payments and are both desirable and necessary for the sector’s basic financial, logistical and operational structure. This is the case for the book sector, where long payment terms are essential to keep an optimal stock rotation throughout the year, while guaranteeing a healthy cash flow for bookshops and ensuring consumer needs are met.
There are several concerning points in the legislative proposal that may severely impact the bookselling trade, given its unique business model and the particular rotation and shelf life of a book as a cultural product.
- One size does not fit all
- Sector specificities and particular business models need to be considered
- Flexible payment terms are an integrant part of the freedom to contract
- Books are slow-moving and slow-selling products
- Long payment is not late payment
- Shorter payment terms mean less liquidity for bookshops
- Uncertainty for trade outside EU
For small business owners in the bookselling sector who rely on flexible and long payment terms as an integral part of the business model, a 30-day cap for invoice payment with no flexibility or exception would have catastrophic consequences. Taking the points presented above into consideration, and given the unique structure of the trade and the specificity of books as a slow-moving product, EIBF asks for the book sector to be exempted from the Regulation’s obligations.
See our full position paper attached.
|EIBF Position Paper_Late Payment Regulation.pdf