McCarthy Tetrault’s 7th Annual Consumer Products and Retail Summit was held on February 23, 2017. Here are our key takeaways from the Summit:
Visions of the Changing Retail Industry
Erol Uzumeri, Searchlight Capital Partners
- The major trends impacting the consumer sector include: experience economy, digital disintermediation, silver economy, convenience, personalization and authenticity;
- Successful retailers need to leverage their customer data to address consumers’ changing preferences;
- Retailers need to carefully consider the investments required to create clear and differentiated positioning and cannot afford to remain stationary with the factors impacting the consumer sector on a daily basis.
Transactional Trends and Issues in the US Retail Market: Implications for Canada
Samuel A. Newman, Gibson, Dunn & Crutcher
- Considering the challenging trends, retailers in distress can consider a non-bankruptcy asset sale, receivership or assignment for the benefit of creditors; sale of assets can also be conducted through a bankruptcy filing;
- Sale through a bankruptcy filing reduces certain transaction risks;
- Retailers should consider value preservation issues such as intellectual property including consumer data, real property and tax attributes.
Opportunities for Retailers and Consumer Products Companies under the new Canada EU Trade Agreement (CETA)
John Boscariol and Robert Glasgow, McCarthy Tétrault
- CETA is expected to come into force in Canada and Europe in the next few months – companies should be doing a review of their operations (both sourcing and sales) to be in the best position to take advantage of CETA benefits;
- For those importing or exporting products between Canada and Europe, check the rules of origin applicable to your products to determine whether you qualify for tariff-free access;
- CETA does more than any other trade agreement in addressing divergent regulations that apply after importation – the new conformity assessment regime is designed to ensure that products can be tested and certified in one location for purposes of regulatory requirements in both jurisdictions;
- CETA stands in stark contrast to the faltering US-EU Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations and the growing worldwide backlash against the liberalization of trade and investment rules – if Canada is able to successfully maintain most of its access to US markets under NAFTA and continues to seek expanded trade and investment arrangements in Asia and elsewhere, it will be in a unique and enviable position for attracting investment in the retail and consumer products sector.
Data, Disruption and Regulation in the Retail and Consumer Facing Industries
Jennifer T. Lee, Deloitte
Kirsten Thompson, McCarthy Tétrault
- Data analytics and artificial intelligence applications are being sought after by retail and consumer facing industries as they seek to drive customer engagement and customer intimacy – and ultimately, profit;
- If these technologies are used, they should be reviewed for privacy issues; both direct and indirect privacy issues are common with these technologies, particularly those developed in other jurisdictions but used in Canada.
Latest Developments in Competition Law
Donald Houston and Dominic Thérien, McCarthy Tétrault
- The Competition Bureau continues to focus on online and mobile advertising, and the application of Competition Act (CA) provisions specifically prohibiting false or misleading representations in electronic messages that came into force as part of Canada’s Anti-Spam Legislation (CASL);
- On July 1, 2017, a new private right of action under CASL will be available for contravention of the CA provisions addressing misleading representations in electronic messages. Penalties include the payment of the amount of the loss or damage suffered and a maximum of $200 for each contravention up to a maximum of $1 million per day of contravention;
- The Competition Bureau continues to take enforcement action with respect to representations related to price, including false or misleading representations as to the “ordinary selling price” of a product.
“Fireside Chat” With Health Canada – Q&A With Consumer Product Safety
Nora Wang, Health Canada
Christopher Hubbard and Katherine Booth, McCarthy Tétrault
- Health Canada is currently inspecting companies for compliance with mandatory reporting obligations under the CCPSA. This inspection project includes a review of the processes companies have in place to assess product “events” and ensure “incidents” are reported;
- Companies are expected to assess product events (e.g., consumer reports) within a reasonable time from learning of the event to determine whether the event constitutes an “incident”. Companies should make this determination using the information available to the company at the time, and taking it at face value;
- If a company determines that an event does not constitute an “incident”, it is recommended that the company document the rationale for that determination and maintain a record.