How Far Can a Brand's Prices Differ Across Europe Before Someone Moves the Goods?

What is the European Commission preparing?

On 5 March 2026 the European Commission asked for evidence on "territorial supply constraints", which it defines as "practices by certain large manufacturers that restrict retailers or wholesalers from purchasing goods in one EU country and reselling them in another, without objective justification".¹ Its call for evidence names "packaging and labelling differentiation, wholesale price differentiation and refusal to supply" as "the most frequent practices that could be considered territorial supply constraints", and says that "product and price differentiation may sometimes be justified".²

The work is moving toward law. The Commission's public consultation runs from 28 May to 4 December 2026, and its page plans the adoption of a "Proposal for a regulation" in the second quarter of 2027.³ According to the law firm Van Bael and Bellis, six national competition authorities, from Austria, Belgium, Czechia, Greece, the Netherlands and Portugal, expressed, in a letter dated 15 July 2026, "strong support" for legislation that defines prohibited practices.⁴ Clifford Chance, another law firm, notes that the target is unilateral conduct "by non-dominant suppliers in the fast-moving consumer goods (FMCG) sector that fall outside the current scope of EU competition law".⁵

Where conduct does fall inside competition law, the Commission has already fined companies for hindering trade between EU countries. In May 2019 it fined AB InBev 200.4 million euros for abusing a dominant position in Belgium by hindering cheaper imports of its own beer from the Netherlands. In May 2024 it fined Mondelez 337.5 million euros for hindering cross-border trade in chocolate, biscuits and coffee.⁶⁷ AIM, the European brands association, says there is "no credible evidence to justify new EU regulation" and warns that intervention "could lead to higher prices, reduced promotions, or less choice in lower-price markets".⁸ This article describes these rules and positions as their sources state them; it is not legal advice.

The question of how far a brand's prices may differ across EU countries is moving from competition cases toward a planned regulation, so a manufacturer needs to know which of its price differences it can explain.

What price can a trader actually buy at?

The Academy's lesson Trade Investment ROI (return on investment) has a section called The Corridor: "how far two markets can drift apart before somebody moves the goods for you".

The test is whether a buyer gets the money just for taking the goods. Whether the money is labeled conditional, that is, paid only when a condition is met, is a different question. A prompt-payment discount is paid to any buyer who pays on time, including a wholesaler who sells on to a trader, so it travels with the goods. A company's trade-terms report can still class it as conditional; the Academy's own Trade Terms Optimizer does so by default. Money paid for agreed work in the retailer's own stores, such as getting the product onto its shelves, displaying it and promoting it to shoppers, stays in that market, because a trader does none of that work.

The price that decides whether goods move is the exportable price, so the money a buyer gets simply for taking the goods, prompt payment included, sets the gap a trader can use.

How wide is the corridor?

The lesson counts the full cost of moving a case: freight, duty, relabeling for the local language, working capital tied up in transit and the trader's own margin, measured "lane by lane", that is, for each route between two markets, and kept current. That can be several times the freight. In a 2020 report, Oliver Wyman compared consumer prices before value added tax (VAT) for health and beauty products across countries. It noted that price differences above 20 percent generally bring a marked rise in cross-border buying, with transport usually costing 2 to 4 percent.⁹ A 2020 study of these constraints for the Commission assumed extra costs, such as logistics, of "up to 10%" on the cheapest purchase price.¹⁰

In points of list price (one point is 1 percent of the list price), corridor = cost of moving a unit / list price, so value per unit sets how narrow the corridor is. At a moving cost of 10 cents a unit, a 1.00-euro product has a corridor of 10 points, a 5.00-euro product 2 points and a 25.00-euro product 0.4 points. Light, valuable products such as coffee sit near the narrow end. Anything that lowers the cost of moving, from cheaper freight to simpler labeling rules, narrows the corridor further.

The corridor is the full cost of moving a case, so in points of list price it is narrowest for valuable products, where a small difference in access money is enough to open a trade.

How much does an access gap hand to a trader?

Take an invented coffee brand that sells the same jar in two neighboring markets at the same list price, 5.00 euros a unit, with all terms as percentages of list price. In market A the retailer receives 30 points of trade money. Of these, 22 points are access money: a structural discount, a logistics allowance and 3 points of prompt-payment discount. The other 8 points are performance money, paid for work in its stores. In market B the retailer receives 22 points: 9 of access money and 13 of performance money. Moving a unit from A to B costs 10 cents all in, and a truck holds 31,200 units. Shelf prices play no part: they are each retailer's decision.

The exportable price is 3.90 euros in market A (5.00 less 22 percent) and 4.55 euros in market B (5.00 less 9 percent). The gap is 0.65 euros a unit, against a corridor of 0.10, so the trade is live. A trader can keep up to 0.55 euros a unit (0.65 less 0.10), on top of the margin already counted in the 0.10. That is 17,160 euros on a truck (0.55 times 31,200). The lesson calls this arbitrage rent, to be split "between the trader and whoever buys from them". The load costs 121,680 euros to buy (3.90 times 31,200), so the rent is 14.1 percent of the purchase price (17,160 divided by 121,680).

The manufacturer's own loss depends on market B's terms. A unit sold there would have brought it 4.55 euros less the performance money paid on it. If the retailer earns 70 percent of its 13 points, that is 4.095 euros (5.00 less 9 percent, less 13 percent times 0.70). So each diverted unit costs the manufacturer about 0.195 euros (4.095 less 3.90), 6,084 euros a truck.

The corridor here is 2 points of list price (0.10 divided by 5.00). A difference of up to 2 points of access money, 11 against 9, would leave a trader nothing after the cost of moving. The actual difference is 13 points, 22 against 9. The example keeps the corridor narrow on purpose, at the low end of the public measures in the previous section. A wider corridor leaves less for a trader but does not close the gap. At the 2020 study's 10 percent of the cheapest purchase price, the corridor is 0.39 euros a unit (10 percent of 3.90), and 0.26 euros a unit is still left (0.65 less 0.39), 8,112 euros a truck.

A 13-point difference in access money opens a 0.65-euro gap against a 0.10-euro corridor, and part of the trader's margin comes out of what the manufacturer would otherwise net in the higher-priced market.

How can a manufacturer close the gap with its own terms?

The lesson's fix leaves the retailer's face value unchanged. The manufacturer offers market A's retailer the same 30 points, but moves 13 points of the structural discount and logistics allowance into performance money paid for agreed work in the retailer's own stores; the 3 points of prompt payment stay. Access money falls to 9 points (22 less 13), so the exportable price in market A rises to 4.55 euros (5.00 less 9 percent), the same as in market B. The gap closes to zero, so the trade stays closed even if the cost of moving a unit falls.

The offer is the manufacturer's to make, and the retailer decides whether to sign it. It is the hardest kind of conversion to sell. After the fix, market A's retailer pays 4.55 euros a unit before any performance money, against 3.90 today, 16.7 percent more (0.65 divided by 3.90). It can earn the 13 points back only once the work is done and checked. In the lesson's own example on the earn rate, a large account will not accept conditions on access money at all, so market A's retailer may ask for the change in steps, with a first-year condition it can meet.

The new money pays for work done in the stores, whatever happens to the goods afterwards. The Commission's 2022 Guidelines on vertical restraints list "refusing or reducing bonuses or discounts if the buyer sells to such customers" among the "indirect measures to induce the buyer not to sell" to particular territories or customers.¹¹ So the terms do not reduce any customer's money because goods were resold or exported.

The retailer loses certainty, and the lesson's section Pricing the Conversion prices that too: budget "about a third of the earn-rate gap as a sweetener", an extra payment that compensates the retailer for that loss. Here the earn-rate gap is the 3.9 points the conversion saves, so the sweetener is 1.3 points. The lesson's one-third rule assumes the retailer marks money at risk down by one seventh, so each point of value that reaches the retailer as performance money costs the manufacturer 7/6 of a point. Paid as performance money, the 1.3 points cost the manufacturer about 1.5 points (1.3 x 7/6). Face value rises by about 2.2 points (1.52 divided by 0.70). The manufacturer still nets about 2.4 points (3.9 less 1.5). On the full 6.3-point saving, a third is 2.1 points. That costs the manufacturer about 2.45 (2.1 x 7/6) and leaves it about 3.85 (6.3 less 2.45).

Paid as access money instead, the sweetener would lower market A's exportable price again. The 1.3 points would reopen a gap of 0.065 euros (1.3 percent of 5.00). The 2.1 points would reopen one of 0.105 euros (2.1 percent of 5.00), above the 0.10 cost of moving a unit. A sweetener paid this way, the lesson warns, "re-inflates the access wallet".

The Academy's free Trade Terms Optimizer, linked under Try it free below, shows the earn-rate side of this fix on its own example portfolio, in dollars.

A manufacturer can close the gap without cutting face value or touching supply or packs, by paying for work in the stores, and at a 70 percent earn rate the fix costs less than the terms it replaces.

What does the fix leave unchanged?

The strongest objection is that closing the gap raises what the retailer in the cheaper market pays the manufacturer on average, and that shelf prices there could follow, much as AIM warns that EU intervention could raise prices in lower-price markets. The fix keeps all 30 points on the table, 21 of them for work in the retailer's stores, but the retailer does lose two things. Unless it does more of the work, its expected income falls by what the manufacturer saves, and money it could count on becomes money it has to earn. The sweetener pays only for the second loss. What happens to the shelf price is the retailer's decision. Leaving the gap open is not free either: besides the rent it leaves to traders, market B's own customers are offered the goods below the 4.55 euros they pay; in the lesson's words, "they want to know why".

The fix leaves a trader nothing to gain, and it does not change what an international retailer compares. The lesson notes that international customers "earn their own rebates, so what they compare across borders is the whole pocket price", the price left after every deduction. In the example, with every point earned, the pocket price is 3.50 euros in market A (5.00 less 30 percent) and 3.90 in market B (5.00 less 22 percent). Simon-Kucher reported in May 2024 that 87 percent of consumer goods manufacturers say their profit is at risk from international retailers and buying groups, while over 60 percent do not proactively manage their net prices at European level.¹²

In negotiation with an international retailer, the manufacturer's answer is a pocket-price difference it can explain by the work each market's stores do. The Commission's call for evidence gives two examples of when differentiation may be justified: "the need to comply with national regulatory requirements (e.g. on labelling)" and "a company's short-term commercial strategy (e.g. launching a new product)". Whether other reasons count is not settled: the call for evidence sets out four options, from a code of conduct to legislation identifying prohibited practices "and when these practices may be justified".

Shelf prices are likely to keep differing between countries whatever the terms. A study of euro-area scanner data from January 2009 to October 2011 found that producer competition, retail structure, local costs and consumer habits "explain a significant part of branded product price differences across countries", while income levels "are unimportant".¹³ A trader compares the manufacturer's exportable price, and a shopper the retailer's shelf price.

Narrowing unexplained differences in the exportable price leaves traders nothing to gain. Any difference that remains needs a reason the manufacturer can explain, such as the work it pays for in each market.

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