Thomas Weber

BRUSSELS – The European automotive sector is lobbying for the inclusion of the United Kingdom, Turkey, and Morocco in the European Union’s new industrial procurement and subsidy framework to prevent the disruption of deeply integrated supply chains.

The European Automobile Manufacturers Association (Acea) on July 1 urged Brussels to grant these nations “justified, targeted exemptions” to the rules. Under the proposed Industrial Accelerator Act (IAA), cars and components must be manufactured within the EU to qualify for public procurement or state subsidies, mirroring the more restrictive approach to industrial support set out in recent updates to the EU’s foreign subsidies regulation.

The legislation is designed to insulate the bloc from “China shock 2.0,” characterized by an influx of heavily subsidized Chinese exports that have undercut European pricing and raised political pressure on Brussels to safeguard domestic manufacturing. However, because the IAA applies strictly to EU member states, the rules threaten to exclude British manufacturers from their primary export destination and risk collateral damage to plants in Turkey and Morocco that feed into EU-based assembly lines.

Supply Chain Integration and Corporate Exposure

The automotive industry operates via a cross-border value chain where ownership often diverges from the location of assembly. Vehicles are routinely designed in one member state, rely on components sourced from a second, and are finally assembled in a third before being shipped across the single market. Several of the EU’s largest automotive groups maintain critical production hubs in the UK that would be disadvantaged under the current IAA draft, raising questions over how “European content” should be defined for the purposes of subsidy control.

Current ownership and manufacturing exposures include:

• BMW: Operates the Mini plant in the UK, supplying both the domestic market and the EU27.
• Volkswagen Group: Operates the Bentley plant in the UK, relying on a supplier network that stretches across Germany and Central Europe.
• Stellantis: Operates the Vauxhall plant in the UK, integrated into its wider European production footprint.
• Other Group Members: JLR, Ford, and Toyota maintain significant UK manufacturing operations that depend on frictionless access to EU markets.

Nissan has privately indicated that its Sunderland facility could face closure if the UK is excluded from the “Made in Europe” provisions. This risk is acute given that more than half of all UK car exports are destined for the EU, making eligibility for EU public tenders and green-transition subsidies a material factor in boardroom decisions on future investment.

“The European automotive industry operates a deeply integrated value chain with the UK, even post-Brexit. Vehicles, components and batteries made in the UK should therefore hold the same status as those made in the EU27 – with equal access to every policy instrument.”

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), stated on June 30 that the rules would “effectively shut out UK-assembled vehicles from most of the European market.” Hawes described the potential exclusion as “one of the most spectacular own goals in history,” noting that many UK plants are owned by European entities and that the burden of adjustment would ultimately fall on EU-based shareholders, workers, and regional economies.

Macroeconomic Pressures and the China Deficit

The drive for the IAA is rooted in a widening trade imbalance and a broader industrial policy shift in Brussels. The EU’s trade deficit with China currently runs at €1bn (£860m) per day and is projected to reach nearly €400bn in China’s favor by the end of the year, sharpening calls from member states for a more assertive response to foreign state support in strategic sectors such as electric vehicles and batteries.

This economic pressure has led to significant corporate restructuring within the bloc. Volkswagen recently proposed cutting as many as 100,000 jobs in Europe as part of a broader effort to combat the loss of market share to Chinese competitors and to reallocate capital towards electrification and software. Similar efficiency drives at other manufacturers have reinforced concerns in national capitals about Europe’s exposure to external shocks and the political fallout of industrial decline in key regions.

The IAA is a French-led initiative, meaning any modifications to the draft will require the approval of President Emmanuel Macron, whose government has championed a more interventionist industrial policy and tighter screening of foreign-subsidised bids for public contracts. While Acea is heavily influenced by German members, the two nations have different strategic exposures; Germany maintains extensive manufacturing footprints within China, leaving Berlin more sensitive to retaliation even as it faces domestic pressure to curb dependence on Chinese demand.

The German chancellor, Friedrich Merz, has proposed a “plaza accord” to curb Chinese economic influence and has identified an “artificially low” yuan as a primary driver of the trade surplus. This move aligns with warnings from the Centre for European Reform that Germany must address the threat of deindustrialization and avoid a scenario in which high-value manufacturing migrates to jurisdictions offering larger subsidies or easier market access.

Regulatory and Diplomatic Status

The EU is currently attempting to balance industrial sovereignty with the need to avoid a full-scale trade war and preserve the integrity of the single market. Officials in Brussels argue that any exemptions under the IAA must be tightly framed to avoid creating loopholes that Chinese manufacturers could exploit via assembly operations in nearby non-EU countries.

On June 29, the EU and China agreed to enter three months of diplomatic negotiations to address the trade deficit and to de-escalate parallel disputes over electric-vehicle tariffs and state aid disciplines. The talks will run in parallel to the EU’s internal legislative process on the IAA, leaving policymakers to juggle external diplomacy with intense lobbying from domestic industry.

The potential for “stranded investments” remains a primary concern for the industry. Acea warned that excluding existing factories would weaken European competitiveness at a critical juncture for the transition to electric mobility and industrial strategy, undermining the objectives of the EU’s own green and digital transition plans set out in its updated industrial strategy.

The UK government is currently attempting to negotiate these exemptions. Britain’s Europe affairs minister, Nick Thomas-Symonds, met with EU trade commissioner Maroš Šefčovič on July 1 to discuss the progress of UK-EU relations, with the Industrial Accelerator Act as a central item on the agenda. The outcome of those talks, and of the parallel debates among member states, will determine whether the IAA becomes a cornerstone of Europe’s response to Chinese overcapacity or a flashpoint in its relations with key manufacturing partners on its doorstep.

CANBERRA – A comprehensive suite of regulatory changes and fiscal adjustments took effect on 1 July 2026, introducing significant shifts in labor costs, corporate compliance requirements, and retail pricing oversight.

The convergence of increased minimum wages, a transition to “payday super,” and new price-gouging prohibitions targets a mixture of cost-of-living relief and corporate governance tightening. For the business sector, these changes necessitate immediate adjustments to payroll systems and compliance frameworks, as well as renewed scrutiny from regulators and investors over how companies manage wage pressures and pricing power.

Labor costs are rising across the board as the Fair Work Commission’s annual wage review is implemented. Approximately 2.8 million employees on award and minimum wages are seeing a 4.75% increase, while entry-level workers-approximately 100,000 people-receive a higher bump of 5.97%. For employers, the changes reshape the floor for enterprise bargaining and will flow through to staffing models, rostering and contractor arrangements.

The following table outlines the primary adjustments to wages and the lowest marginal tax bracket:

Beyond the base wage, government-funded paid parental leave has expanded to 26 weeks, effectively providing six months of leave at the national minimum wage. Provisions for partners have also increased from 15 to 20 days, continuing a shift in federal workplace policy towards shared caring responsibilities and greater workforce participation for parents returning to work.

Corporate treasury and payroll operations face a structural shift with the commencement of “payday super.” Employers are now required to remit superannuation contributions at the same time as wages, rather than on a quarterly basis. Contributions must reach the relevant funds within seven business days of the payday. In practice, this forces businesses to bring forward cash-flow planning and integrate super payments into core payroll cycles, rather than treating them as a back-end obligation.

This reform is designed to eliminate the estimated $3bn in unpaid superannuation that occurs annually, shifting the financial burden of payment frequency onto the employer to ensure worker retirement savings are tracked in real-time and more easily audited by regulators.

Retail operations, specifically within the grocery sector, are now subject to aggressive price-gouging laws enforced by the Australian Competition and Consumer Commission. The legislation targets any supermarket with annual revenue exceeding $30bn and is intended to give competition authorities clearer grounds to intervene where margins are judged to exceed reasonable cost recovery.

New laws prohibit any supermarket with revenue exceeding $30bn from charging a price for a grocery product that is ruled excessive compared to the cost of supply, plus a reasonable margin.

Currently, only Coles Group Ltd and Woolworths Group Ltd meet the revenue threshold for these rules. Both entities have faced sustained scrutiny over profit margins and pricing strategies, particularly during recent cost-of-living pressures. Non-compliance will result in financial penalties, and boards are expected to factor regulatory risk more explicitly into their pricing and disclosure decisions.

Compliance obligations have also expanded for professional services. Anti-money laundering (AML) and counter-terrorism laws now encompass the real estate, law, accounting, conveyancing, and jewellery sectors. These “gatekeeper” businesses must now register with AUSTRAC, verify customer identities, and report specific transactions to combat illicit financial flows. The move brings Australia closer to international standards on beneficial ownership transparency and is expected to reshape client onboarding, record-keeping and internal audit functions across these industries.

Further corporate communication changes require businesses using branded text messages to register their sender ID. Unregistered messages will be grouped into a single thread and labeled as “unverified,” a move intended to reduce corporate impersonation and fraud and to push larger organisations towards consistent, auditable communication channels with customers.

State-level adjustments are focusing on energy costs and property taxes, adding a patchwork of local policy responses to federal reforms:

• Victoria: Default electricity prices have been reduced, saving roughly 512,000 households $84 annually and 62,000 small businesses $241 annually. A portable rental bond scheme also begins, allowing renters to transfer bonds between properties and easing cash-flow constraints for tenants in a tight housing market.
• ACT: Conveyance duty (stamp duty) has been completely abolished for first homebuyers, with expanded exemptions for pensioners and eligible NDIS participants, furthering the territory’s long-term shift away from transaction taxes and towards broad-based land charges.
• Queensland: New speed limits for e-mobility devices are in effect, capping speeds at 12km/h on footpaths and 25km/h on roads. The Reportable Conduct Scheme (RCS) also begins for organisations caring for children, tightening oversight of institutions following a series of national child-safety inquiries.
• Western Australia: The Containers for Change refund program now includes wine and spirit bottles, as well as cordial and flavoured milk. A one-off $100 fuel support payment is available to license holders via the ServiceWA app, providing targeted relief to motorists facing higher transport costs in a geographically large state.

In the automotive sector, federal road rules now mandate updated energy consumption labelling for new light vehicle models supplied for the first time starting 1 July 2026. The changes are designed to give consumers clearer information on running costs and emissions at the point of sale, supporting broader national emissions-reduction and fuel-efficiency policies.

For small businesses with an annual turnover under $10m, the instant asset write-off for assets under $20,000 has been made permanent. The measure effectively turns what had been a recurring short-term budget decision into a standing feature of the tax system, allowing owners to plan capital investment with greater certainty.

Energy markets in NSW, south-east Queensland, and South Australia have also introduced the “solar sharer” opt-in program. This allows households with smart meters to access at least three hours of free electricity during midday peaks to utilise excess grid generation, nudging consumer behaviour towards daytime consumption and easing pressure on evening peak demand.

Taken together, the 1 July changes mark one of the most wide-ranging recalibrations of Australia’s regulatory and fiscal settings in recent years, touching household incomes, corporate conduct and capital allocation. The ACCC is now positioned to initiate financial penalties against supermarkets exceeding the $30bn revenue threshold upon the first ruling of excessive pricing, signalling that enforcement, not just rule-making, will define the next phase of Australia’s response to the cost-of-living crisis.

LONDON – A structural shift in population demographics is creating a widening imbalance in the state pension system, increasing fiscal pressure on the sovereign budget as the ratio of retirees to active taxpayers declines.

The contraction of the working-age population relative to the retired cohort challenges the sustainability of pay-as-you-go pension models. This demographic trajectory necessitates a realignment of fiscal policy to manage the rising cost of state entitlements against a shrinking tax base, particularly in a system where today’s contributions directly finance today’s pensions.

Current data indicates that more than 13 million people, representing 19% of the population, have reached state pension age. Projections show this figure will continue to rise regardless of policy interventions to extend working lives, reflecting long-term trends in longevity and lower birth rates across the United Kingdom.

The projections for 2050 hold even with the state pension age rising to 68 under the timetable set out in the UK’s State Pension Age Review. This trend suggests a lasting shift in the dependency ratio, where fewer workers are available to provide the tax revenue required to fund the pensions and healthcare needs of a larger elderly population in an already highly developed welfare state.

Fiscal Sustainability and Labor Markets

The economic impact of an aging population extends beyond direct pension payments. A smaller proportion of working-age citizens typically results in tighter labor markets and potential stagnation in productivity growth, as the workforce lacks the renewal rate seen in previous decades and employers struggle to fill vacancies in key sectors such as health and social care.

For the Treasury and the Office for Budget Responsibility, the challenge is to contain age-related spending while preserving confidence in the pension promise. Governments facing these demographics often rely on International Monetary Fund frameworks to assess fiscal sustainability, balancing the need for social stability with the requirement to limit sovereign debt and protect the country’s credit rating. Increasing the retirement age is a primary lever used to reduce the duration of pension payouts and maintain labor force participation, alongside measures such as incentivising later-life work, targeted migration policy and reforms to disability and early-retirement routes.

More than 13 million people – 19% of the population – are currently of state pension age. By 2050, even with the state pension age rising to 68, that group is projected to exceed 15 million people, nearly a quarter of the population, with numbers projected to climb towards 17 million by the 2070s.

Policymakers and regulators are also under pressure to ensure that intergenerational fairness is maintained, as younger taxpayers face higher contributions, elevated housing costs and uncertain real-wage growth while being asked to underwrite more expensive retirements.

Market Shifts in Retirement Finance

The projected increase in the pension-age population is driving a structural shift in the financial services sector. Asset managers and insurance providers are seeing increased demand for private annuity products and defined-contribution schemes as individuals seek to supplement state provisions and hedge against the risk of further reforms to eligibility or generosity.

The OECD has noted a global trend toward shifting pension risks from the state or employer to the individual. This transition increases the relevance of wealth management services and long-term equity investment vehicles designed to outpace inflation over multi-decade retirements, while sharpening the focus of regulators on fees, transparency and suitability in retail investment products.

Corporate governance is also adapting, with firms implementing phased retirement programs to retain institutional knowledge from employees who would otherwise exit the workforce at the traditional retirement age. Flexible working arrangements, retraining initiatives and targeted health benefits are increasingly deployed as tools to keep older workers economically active for longer.

The government remains committed to the scheduled increase of the state pension age to 68 to mitigate the projected funding gap. But with demographic pressures intensifying, officials acknowledge privately that further adjustments to contribution levels, eligibility criteria and complementary private savings incentives are likely to remain on the table for future parliaments.

DUBLIN – The agri-food regulator An Rialálaí Agrabhia has identified systemic power imbalances and a “fear factor” within the supply chains of major grocery retailers and wholesalers.

Findings from the regulator’s second annual supplier survey reveal that while overall compliance with unfair trading regulations is high, smaller producers remain vulnerable to margin compression and retaliatory risks. This data arrives as the state body prepares for a significant expansion of its enforcement powers in December.

The survey analyzed more than 1,300 trading relationships between nearly 500 suppliers and eight of the dominant players in the retail grocery sector: Aldi, BWG Foods, Dunnes Stores, Lidl, Marks & Spencer, Musgrave Group, Sysco, and Tesco.

Regulatory Compliance and Unfair Trading Practices

The research evaluates supplier-retailer dynamics against legislation stipulating 16 specific Unfair Trading Practices (UTPs). These regulations are part of a broader EU-wide framework designed to protect smaller operators from the disproportionate bargaining power of large-scale buyers, and have been transposed into Irish law through the Unfair Trading Practices Regulations.

One in nine respondents reported being subject to a UTP, a decrease from one in seven in the previous year. However, the regulator highlighted the persistence of “unconditional black UTPs” – practices prohibited in all circumstances – which include:

• Late payments to suppliers.
• Cancellation of orders at short notice.
• Requirements for suppliers to pay for product losses regardless of responsibility.

Suppliers reported serious ongoing issues regarding the cancellation of perishable product orders and a pervasive fear of backlash when reporting these practices to authorities. For smaller primary producers, the regulator notes, a single cancelled order or extended delay in payment can have disproportionate implications for cash flow and investment.

Systemic Market Pressures

The regulator found that while relationships often appear functional on the surface, they are governed by “wider system-level pressures.” These include pricing and decision-making power concentrated with buyers and fixed-payment processes that disadvantage smaller entities in the agri-food supply chain.

Rising operational costs, driven by wage increases, input price volatility and the need to adapt to climate change, have created significant friction. Suppliers reported that retailers often refuse to accept price increases tied to these factors, leading to squeezed margins, deferred investment and, in some cases, staff layoffs.

“We are too small to complain.”

The report concludes that buyers largely control “if, when, and how prices change,” effectively determining how inflationary pressures are distributed along the chain. While larger suppliers possess the legal and commercial leverage to push back against these pressures – including access to in-house legal teams and diversified customer bases – smaller suppliers absorb greater risk and are less able to pass on inflation.

The impact is further exacerbated by distributor-led models, which the regulator noted “extend payment timelines further,” increasing financial exposure for those with smaller capital buffers and limited access to working capital facilities.

Corporate Governance and the Culture of Fear

A significant portion of the research focused on the psychological dynamic between suppliers and buyers. An Rialálaí Agrabhia identified a “fear factor” that discourages the reporting of UTPs, despite the formal protections that exist on paper.

Suppliers cited three primary reasons for remaining silent:

• Fear of retaliation, specifically the risk of having products delisted.
• Concerns that the regulator might reveal the reporting source to the buyer.
• The belief that their identity could be easily guessed even if anonymity is maintained.

Testimony from suppliers highlighted communication failures, with some noting that buyer interaction is often limited to emails with no response, or that poor forecasting systems create “immense pressure” on the supply chain when orders are adjusted at short notice. In several cases, suppliers said they relied on informal relationships and intermediary organisations rather than formal complaints channels to raise concerns.

The regulator frames these behaviours as a corporate governance challenge for major retailers and wholesalers, arguing that internal compliance structures and board-level oversight will be critical to reducing perceived retaliation risks and normalising engagement with the State watchdog.

Expanded Enforcement Powers

Established in December 2023, An Rialálaí Agrabhia currently operates as an independent State body under the Department of Agriculture, Food and the Marine, with a mandate to oversee fairness and transparency in the agri-food supply chain from farm to shelf. While suppliers describe the regulator as a “comforting presence,” Chief Executive Niamh Lenehan stated there is still work to do to “ensure that all suppliers feel confident in raising a potential breach of the UT regulations.”

To address the current lack of transparency, the regulator will be granted increased powers in December under secondary legislation implementing the EU unfair trading framework. These changes will enable the body to compel businesses, including global entities such as Tesco and Sysco, to provide mandatory data regarding:

• Pricing structures.
• Supply chain logistics.
• Salary data.

The regulator will also gain the authority to issue administrative fines for non-compliance, moving its remit beyond guidance and informal resolution towards sanctions and deterrence. These powers follow repeated failures by businesses to provide requested data voluntarily and are intended to give the State clearer sight of how value is distributed along the supply chain.

For policy-makers in Dublin and Brussels, the coming year will be a live test of whether stronger disclosure obligations and the threat of penalties can shift entrenched commercial practices. The effectiveness of these enhanced powers will be measured in the next annual supplier survey, which will determine if the added regulatory heft begins to correct the current power imbalance in the agri-food sector or if further legislative intervention will be required.