Louis Delhaize and Intermarché combine their buying power

The European food retail buying landscape is undergoing a major redrawing: following the end of the alliance between Carrefour and Louis Delhaize, the latter is entering into a partnership with Intermarché.

Partners retain autonomy

Food retail groups Louis Delhaize and Intermarché have concluded a buying agreement for a period of five years. In a press release, they state that the partnership should strengthen the competitiveness of both groups. Both groups will retain their full autonomy and commercial independence. Strategic information will remain confidential.

In France, Intermarché will supply the Louis Delhaize group with major consumer products, mainly in food – excluding fresh agricultural products and local brands. In Belgium and the Grand Duchy of Luxembourg, the two groups are setting up a joint purchasing centre, which will be managed by Intermarché. This central office will negotiate with the major FMCG suppliers on behalf of the two partners. National brands of SMEs are not covered by the agreement.

The Louis Delhaize group operates in Belgium, France, Luxembourg and Romania, with brands such as Louis Delhaize, Cora, Match, Delitraiteur and houra.fr. The Mousquetaires group is present with Intermarché and Netto in Belgium, France, Poland and Portugal.

Controversy

The news of the new alliance comes shortly after the announcement that Carrefour is ending its purchasing alliance with the Louis Delhaize group. Carrefour is reportedly working on its own purchasing centre at European level, which will purchase for the six countries where the retailer operates.

Purchasing alliances are controversial: according to many brand manufacturers, they mainly serve to increase the profit margins of the retailers involved. According to retailers, however, such alliances are a necessity to create a more level playing field in negotiations with multinationals and lead to lower sales prices in the shops. The latter claim was recently supported by a major study on pricing at German retailer Edeka during its membership of the retail alliance AgeCore. According to the study, shoppers paid on average 12% less for products purchased by the retailer through the buying alliance.