RPC the international law firm has launched the Spring issue of its Retail Compass, outlining regulatory and legal changes to the sector over the next six months.
Jeremy Drew, partner and co-head of Retail & Consumer at RPC, says: “Pandemic-related restrictions have ended only to be replaced by a new set of systemic challenges, including rising supply chain costs and a reduction in consumer disposable income due to the increased cost of living.
“While there are plenty of challenges, many retailers and brands continue to innovate and invest in new channels, such as quick commerce and digital commerce (including NFTs and the metaverse for the more avant-garde).
Karen Hendy, partner and co-head of Retail & Consumer at RPC, added: “We’re also seeing an increase in the digitalisation of supply chains as retail businesses look to increase efficiency and seek to reduce costs. The pursuit of more environmentally-friendly product ranges continues with a ‘pull’ factor driven by consumer buying habits and a ‘push’ factor from new government taxes and increased scrutiny from the CMA on ‘green’ marketing claims.”
Some key legal issues include:
Plastic packaging tax – A new tax will come into effect from April on plastic packaging manufactured in or imported into the UK that is not made up of at least 30 per cent recycled material. Companies that import or manufacture more than 20 tonnes of plastic packaging annually will be taxed £200 per tonne of packaging. It’s likely that these costs will be passed down to the consumer. While most retailers will opt to purchase products with more recycled packaging, some may look to purchase from smaller manufacturers that do not meet the threshold for coming under the scope of the tax.
Protect against IP risks associated with NFTs – Lack of regulation of the NFT market means that brands looking to capitalise on the growing trend face increased risks to their intellectual property. Brands are advised to take action to protect their copyright. Contracts with creators of NFTs need to include provisions that the creator cannot ‘re-mint’ the NFT, which would cause a drop in its value. Brands need to check whether the terms of their insurance covers losses from NFTs being stolen by hackers or server failures. It is also important to carefully review the terms of any agency ‘minting’ the NFT to ensure these accurately reflect the marketing claims of the NFT.
Digitalisation of supply chain – The severe disruption to supply chains, arising from Brexit, the Covid-19 pandemic and now the war in Ukraine, comes at a time when consumers are now expecting increasingly speedy deliveries. Key to ensuring expectations are met amidst global challenges, will be digitalisation. Retailers need to use advanced analytics; smart procurement tools; planning and execution systems and real-time reporting. Incorporating this technology will provide retailers with visibility throughout all stages of the supply chain, meaning they can quickly anticipate and deal with disruption. Another key element will be training staff members in how to interact with and utilise this technology.
Data regime – The UK’s new data protection proposals are set to offer businesses an alternative to GDPR. The regime is believed to be less time and labour-intensive for businesses. It will seek to make the eCommerce process more streamlined for customers. However, businesses that operate in the EU will still need to be compliant with GDPR, suggesting that many will need to take a twin-track approach to data compliance. This could prove costly to retailers that will need to be compliant with two different regimes. The ICO has also voiced concerns that the balance between reducing the administrative burden on businesses and protecting the rights of individuals may be tipping in the wrong direction. Areas of concern include proposed reforms to cookies.
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