The buying alliance between Carrefour and Tesco is subject to strict conditions by the French competition authority: fruit and vegetables are excluded from the cooperation, as are products of which Carrefour has more than 15% market share.
Private label producers threatened
The purchasing alliance between Carrefour and Tesco, which aims to buy both branded and private label products together, is being restricted following protests by the French competition authority. It was feared that the position of private label producers in particular would be weakened too much if the two retail superpowers were to join forces.
Tesco and Carrefour have decided to exclude certain product categories from the cooperation in order to meet the concerns and to avoid prosecution. The alliance was concluded in 2018 and has been in operation ever since.
No lamb, less cheddar
From now on, unprocessed agricultural products of national and European origin, such as fruit and vegetables, plants but also lamb, may not be purchased together. Eight other product groups are also subject to restrictions, including fresh cheeses, cheddar and canned tomatoes. In these categories, Carrefour may only buy up to a maximum of 15% market share in France through the alliance with Tesco.
Finally, both retailers promise not to exclude small suppliers. By this Carrefour means in particular companies with less than 250 employees and a turnover of less than 50 million euros. These are concessions which Carrefour and Tesco themselves have proposed and which the French competition authority has now officially obliged.