74 U A concentrated purchasing market SUPPLIERS ARE CONFRONTED BY BUYERS (DISTRIBUTION GROUPS), THE TOP FOUR OF WHICH ACCOUNT FOR 92% OF THE MARKET. 34.2% ENVERGURE 21.1% 21% 15.9% 5.5% LECLERC HORIZON LIDL ITMP/FRANCAP 2.3% ALDI 92.2% Source: 2018: Xerfi study, Major food retailers (translated), from Kantar Worldpanel data. … Following this communication, the Autorité volume commitments by distributors), THE DISTRIBUTORS’ opened a litigation investigation in order to which limits their market power. The rela- COMMITMENTS REDUCE determine whether these joint purchasing tively low profitability of suppliers of retai- THE SCOPE OF THE JOINT agreements were detrimental to competi- ler’s own-brand goods illustrates their weak PURCHASING AGREEMENT tion and subsequently started proceedings market power. Until recently, the sector was ex-officio oth on the merits and in terms of, b also marked by a general and significant The Auchan/Casino/Metro/ interimmeasures, on the basis of the speci- drop in sales over the last few years, which Schiever agreement fic mechanism for purchasing offices intro- may have weakened retailer’s own-brand The distributors concerned undertook to: duced by the Egalim Law. This allows the suppliers economically. • Exclude from the cooperation 6 families Autorité to suspend purchasing agreements The implementation of the two cooperation of agricultural products or products from if they cause harm to co mpetition. agreements in question risked weakening sectors experiencing economic difficul- a significant number of small businesses, ties: drinking milk, fresh milk, eggs, cooked such as SMEs and VSEs, which produce a cold meats in self-service sections, cooked THE COMPETITION CONCERNS large proportion of the supply of retailer’s cold meat aids (diced, chopped, shredded RAISED BY THE AGREEMENTS own-brand products at national level (77% cooked or dry-cured hams, etc.) in self-ser- of the product references on the shelves vice sections, cider; The investigation of two agreements iden- and 72% of sales by value). Some of them tified competition concerns which the com- are an integral part of the innovation pro- This is the first time that panies wished to remedy by proposing cess for private label products. The Autorité commitments. therefore wished to avoid a risk of dimini- the Autorité has looked in The competitive risks identified were pri- shing the ability or even the incentive of such depth at the impact of marily in the upstream market for the sup- suppliers to invest and innovate, which may ply of retailer’s own-brand. affect the welfare of consumers in the retail joint purchasing agreements The upstream supply market is charac- market. upstream (with regard to terised by contractual conditions rather unfavourable to suppliers (absence of producers) and downstream exclusivity, short-term contracts, lack of (with regard to competition between retailers). T I O N • M A S S R E T A I L D I S T R I B U T I O N • M A S S R TROPER LAUNNA 0202 – erutuf evitisop erom a gniretsoF E A I L D S T R I B