This week, the European Commission opened a formal investigation into possible secret agreements between the French food retailers Casino and Intermarché. They are alleged to have coordinated their selling prices, which is contrary to EU competition rules.
Buying alliances are not problematic; price agreements are
The fact that Casino and Intermarché decided to join forces for procurement in 2014 is not a stumbling block for the European Commission. In a press release, European Commissioner Margrethe Vestager stated that buying alliances between retailers can lead to lower prices for consumers. But, she then adds: "Such benefits can however disappear quickly if retailers use these alliances to collude on their sales activities." In conclusion, the Commission is concerned that both retailers, by working together, went beyond the initial purpose of the buying alliance and also coordinated their pricing policies. This is something the Commission now wants to investigate.
This investigation is a follow-up to searches that took place in May of this year at the head offices of both retail groups. At that time, the European Commission did not want to mention any names, although the companies involved did confirm the news themselves. Casino and Intermarché formed an alliance in November 2014 under the name of INCA, in order to have a stronger joint hand in negotiations with brand manufacturers. Last year, that cooperation ended as Casino decided to work with Auchan to obtain better prices from its suppliers.