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After German Edeka, French retailer Intermarché also wants to leave the AgeCore alliance. In the background is a redrawing of the landscape of French purchasing alliances: “Everyone talks to everyone”.
Threatening court case
Last week, Edeka called off the European retail alliance AgeCore, and now Intermarché is following suit, according to French business newspaper Les Echos. Edeka is dissatisfied because it cannot capitalise on its dominant position: the German market leader represents 40% of the alliance but within the organisation the rule is “one member, one vote”. The Germans have already set up a new purchasing centre: Everest, together with the Dutch web supermarket Picnic.
At Intermarché, other factors are at play. One is a lawsuit filed by the French competition watchdog. The retailer is accused of abuse of power via the purchasing centres AgeCore and ITM Belgium. The French Ministry of the Economy considers it unacceptable for central buying offices to demand money from brand manufacturers without any real quid pro quo. Between 2018 and 2020, AgeCore put pressure on major brand manufacturers such as Nestlé, PepsiCo, Mars or Coca-Cola by stopping orders. If convicted, the retail alliance’s entire business model risks being shaken up.
French relations
A second factor is the balance of power in the internal French food retail market. Here, too, retailers have united to be stronger in their negotiations with suppliers: the largest alliance is Envergure, with Carrefour, Système U and Provera (Cora). These alliances have a term of three years, which expires at the end of this year. The retailers want to prepare themselves for the negotiations at the end of this year, and are exploring the possibilities. Intermarché wants to keep all options open. “Everyone is talking to everyone”, insiders tell the newspaper. In the course of April, the contours of the new French purchasing landscape may become clear.
In the meantime, what will happen to the remaining members of AgeCore is an open question. Colruyt, Conad, Coop and Eroski together do not have enough weight to make much of an impression in Europe. CEO Dirk Depoorter, who only recently took over the helm of the organisation, has a tough job ahead of him… The landscape of European alliances may also have to be completely redrawn.
