"Retail alliance Epic Partners holds brand manufacturers to ransom”

Brand manufacturers are complaining that retail alliance Epic Partners, which was recently formed at the initiative of Edeka, is abusing its power to put pressure on suppliers.

Entry fee

The association of European brand manufacturers, AIM, claims that the new retail alliance exploits its power and thus distorts competition. The organisation refers to practices reminiscent of the approach of AgeCore until recently: that alliance – which includes Colruyt – demanded ‘entry fees’ from manufacturers, putting pressure on large multinationals by temporarily halting orders for certain products.

“With a retailer wielding Epic members’ market power, which can represent 20 to 30 % of your sales in some markets, you have no choice but to yield to demands that are beyond unfair: they are anticompetitive and your business is held hostage”, says Michelle Gibbons, director general of AIM.

Controversial

Former AgeCore member Edeka founded Epic Partners in August this year and placed former AgeCore director Gianluigi Ferrari at the head of the organisation. Other members include Magnit (number two in Russia), ICA (number one in Sweden), Jeronimo Martins (market leader in Poland and number two in Portugal), Migros (number one in Switzerland) and Dutch online supermarket Picnic. Together, these members represent a purchasing power of 142 billion euros.

It is not very surprising that there is great unrest in food retail at the moment, now that brand manufacturers are all announcing hefty price increases. Through their purchase alliances, retailers want to form a counterweight to their largest international suppliers. This is perfectly legal – the European Parliament does not see retail alliances as a source of unfair competition – but controversial, as they are sometimes said to have questionable negotiating practices. In France, E.Leclerc and Intermarché have already had to answer to the courts for abuse of power.