Intermarché accused of abuse of power

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In France, the buying centres of Intermarché are accused of "abusive commercial practices". The Ministry of Economy is taking the distributor to court, thereby potentially undermining the operation of alliances such as Agecore

 

Pressure

In 2018, the French competition watchdog Direction générale de la concurrence (DGCCRF) launched an investigation into the purchasing alliances Agecore (Switzerland) and ITM Belgium. The DGCCRF now concludes that the retailer put 93 suppliers under pressure: they would have had to pay large sums to continue supplying to the supermarket chain.

 

"Intermarché forced numerous suppliers through various means of pressure (stopping orders, deletion of brands, etc.) to sign an international contract first with Agecore, then with ITM Belgium, in order to continue distributing their products in the Intermarché network in France," the French food distribution magazine Linéaires quotes from a statement by the Ministry of Economy.

 

Snowball effect? 

It is worth noting that the Ministry considers the services offered by these international buying centres to be disproportionate to the fees they charge. It is purely about "the right to enter into negotiations without any real economic return: the cost of this is much higher than the increase in turnover it is supposed to generate," it says.

 

Thus, the French authorities are questioning the operation of international alliances that negotiate on terms and conditions in addition to the national agreements between suppliers and retailers. If the commercial court condemns Intermarché's practices, this may well cause a snowball effect.
 

High penalty

The French government asks the commercial court to impose a fine of over 150 million euros on Intermarché. This sum is equivalent to one per cent of the supermarket chain's annual turnover in France. Last year, Eurelec, the Belgian buying centre of E. Leclerc, was also heavily fined for similar reasons.

 

The retailer disagrees with DGCCRF's verdict and will "demonstrate the legality of its international negotiations, which are at the service of consumers' purchasing power."