Are purchase alliances illegal? Two inquiries fuel debate

This week, the offices of supermarket chains Casino and Intermarché (in France) and Carrefour and Louis Delhaize (in Belgium) were visited by inspectors from different competition authorities. They are investigating whether the retailers violated antitrust regulations with their purchase alliances.

Purchase alliances under attack

Accompanied by judicial police officers, investigators of the European competition authority entered several French offices unannounced and stayed there all day, Le Figaro reported. Meanwhile, the European Commission has confirmed that an investigation into possible commercial malpractices is ongoing, but no names were mentioned.

The investigation is connected to the partnership agreement made by Casino and Intermarché in 2014. The retailers united their purchase departments to make a stronger front in their negotiations with brand manufacturers. That alliance was a response to a similar collaboration between Auchan and Système U. In 2018, the French market saw another major shift and Casino ended up partnering with Auchan. In return, Carrefour and Système U forged their own alliance, the biggest in the country.

Food retailers consider purchasing alliances to be a way to pressure their suppliers and arm themselves against increasing price competition, but it looks like both national governments and Europe are becoming increasingly critical of such alliances. Collaborations between competitors is a delicate matter in terms of fair commercial practices. Earlier this week, Belgian supermarket chains Carrefour and Provera (Louis Delhaize group – not part of Ahold Delhaize) were visited by the Belgian competition authority BMA. Several brand manufacturers had raised questions concerning the purchasing alliance made by the two chains near the end of 2018.