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French supermarket group E. Leclerc is fined for 117 million euros because the company forces suppliers to lower their prices through its Belgian purchasing centre. French law prohibits this sort of pressure.
Three times the benefit
After an investigation by the French competition and anti-fraud authorities, State Secretary for the Economy Agnès Pannier-Runacher has decided to fine the supermarket group for a record 117 million euros. Allegedly, the biggest distributor in France forced its suppliers to lower their prices considerably during negotiations, without offering anything in return.
It seems the chain’s only argument was threatening to boycott suppliers. According to the French authorities, there were even some cases of revenge measures. Since such practices are illegal according to the French competition watchdog, the company received the maximum fine: three times the amount Leclerc made at the expense of its suppliers.
Seventh conviction for Leclerc
The fine is so high because this is not the first time Leclerc has been found guilty of such practices. Only last year, the French government accused the retailer of enforcing illegal discounts from a number of multinationals through its French purchasing centre Galec. The events took place between 2013 and 2017. According to Pannier-Runacher, Leclerc has been convicted seven times over the past fourteen years.
The competition watchdog is especially concerned because these practices seem to be spreading towards smaller and more vulnerable suppliers. In this case, Leclerc went through its purchasing centre Eurelec, which is located in Belgium and which was founded in collaboration with German retailer Rewe. Such international purchasing groups are being closely monitored these days. The French government is particularly watchful and hopes to set an example with the record fine.
“If the fine is too low, nothing will change,” Pannier-Runacher tweeted: she believes retailers should know they can lose more than they can earn through these practices. Leclerc considers the verdict to be part of the “continuous attacks on the distributor, intended to pressure the chain into giving up its low price policy for consumers”.
