Brand manufacturers fear "musical chairs" of retail alliances

RetailDetail

As retail alliance AgeCore breaks up, a movement of alliances in food retail is imminent. This could lead to a further spread of unfair trading practices in the EU, brand manufacturers fear.

 

"A new phenomenon in European retail"

In recent days, both German market leader Edeka and French supermarket chain Intermarché announced that they will leave retail alliance AgeCore. This alliance, which also includes Colruyt, Conad, Coop and Eroski, was regularly in the news between 2018 and 2020 with boycott campaigns against major brand manufacturers such as Nestlé, Mars, PepsiCo and Coca-Cola. However, the fact that the organisation's survival is now under threat is not necessarily good news, fears AIM, the European Brands Association. As AgeCore members will forge alliances elsewhere, there is a risk that their business practices will become more widespread in Europe.
 

"Edeka, moving to Everest, a new alliance incorporated in the Netherlands with e-player Picnic, creates a whole new phenomenon in European retail, with the potential for abusive behaviours to spread across the physical and digital shelves", commented Director General Michelle Gibbons of AIM. "The musical chairs of retailers switching alliances begs the question of how, or even whether, these collaborations are truly regulated and what is going on with such moves. Where is the European Commission with its investigation into the exchange of commercial information between retailers in such alliances that it launched in 2019?"
 

According to AIM, alliances such as AgeCore are not true buying groups, but act as gatekeepers guarding access to the European retail market. Practices such as stopping orders and taking brands off the shelves if they do not pay (or threatening to do so) have an anti-competitive effect, according to AIM, which ultimately translates into reduced choice for consumers.