Online Retailers Amongst Those Supporting Tyre Labelling Rules

On April 22 the European Parliament approved – by a large majority – a number of draft measures that will see tyre performance in fuel efficiency, wet grip and noise levels explained on a standardised label attached to new tyres. The new rating system, pencilled in for implementation by late 2012, will use a scale similar to that utilised on the EU Energy Label or “fridge mark” as it has affectionately been dubbed.

Now that the tyre labelling measures first published in November have been approved, it has been proposed that tyres generating particularly low levels of noise be given an extra insignia, imprinted on the outer sidewall. Another proposed change is an upping of the level of information provided in tyre advertisements – the aim is to better inform consumers and provide a stimulus for the development of safer and more environmentally friendly tyres. However, specific details of the labelling scheme have yet to be finalised, and the draft text still awaits the scrutiny of the Council of Ministers, the body representing the 27 EU member states.

Nevertheless, even before the binding details are committed to paper, some parties have questioned the usefulness of labelling a product that is seldom seen before it is fitted to a car. With this in mind the question is: at which point will the consumer see the label?

One sector of the market that appears to value the tyre labelling concept is the online retail segment. And if the latest proposal to require the ‘tyremark’ label to be placed on product advertising doesn’t go through, the e-tailers have the most to gain. This section of the tyre market, which holds an approximate 2.5 – 3 per cent market share across the main European markets, is unusual in that the vast majority of its customers do read information about the particular products they are looking for by virtue of the nature of the online shopping.

In response to the EU labelling vote Mike Welch, managing director of leading online tyre business Blackcircles.com commented: “The plan to label tyres with performance and eco-information could mark a sea change in the way people buy their car tyres. It will give motorists a much greater level of information than they’ve enjoyed before and allows them to make more informed decisions. At the moment, choice is dictated by retailers, many of whom are hamstrung by the narrow range of products they are able to offer customers at garages. These new proposals will vest more of the decision-making process back in the hands of the consumer.”

Welch’s argument is that labelling will arm customers with more knowledge and lead to greater competition between tyre brands, which can only be good news for consumers. As a result he believes retailers will be forced to change their approach and widen the range of tyres they make available for sale: “We’ve already seen this movement towards wider choice through our own business growth. We’ve enjoyed success by offering motorists the widest possible selection and allowing them to buy online and have them fitted when and where it suits them. It’s all about choice and consumers cannot get enough.”

ETRMA: Industry favours informative measures

Fazilet Cinaralp, secretary general of ETRMA (European Tyre and Rubber Manufacturer’s Association), which was involved in the legislation’s consultation process commented: “The tyre industry favours measures that would inform consumers in a clear, transparent and uniform way on key parameters related to safety as well as to environmental performances of tyres. We welcome the approach taken by the European Parliament.”

Cinaralp also shed light on further modifications to the proposal: “The proposal has been changed from a directive to a regulation, in order not to suffer from potential differences and delays in national implementation.” Critically she voiced the association’s appreciation for “the attention the parliament has given to ensure that a robust enforcement system of the labelling scheme is foreseen at national level.” However quite what this means in practice remains to be seen. As it has been the case in the most recent tyre-related legislation (restrictions on the use of aromatic oils in tyres, for example), the European Parliament has agreed that the reference for implementation of the tyre labelling rules will be the production date.