CARREFOUR AND TESCO PROPOSED COMMITMENTS TO THE FRENCH COMPETITION AUTHORITY
23/10/2020
Autorité de la concurrence received commitment proposals from Carrefour and Tesco about redefining the scope of their cooperation on own-brand labels regarding the investigation on joint purchasing agreement. Autorité started the investigation after the investigation about the transmission of several planned joint purchasing agreements made in May 2018 in order to assess their impact on competition upstream (on suppliers) and downstream (on consumers).
Autorité reached the understanding that joint purchasing agreements could undermine companies that are part of the innovation process for their own-brand products and could reduce the ability of suppliers to invest and innovate, thereby harming the well-being of consumers in the retail market.
In response to the competition concerns raised by the Authority, the parties proposed following commitments:
- Excluding several groups of fruit and vegetables (citrus fruit, courgettes, kiwis, melons, grapes, peaches, nectarines, etc.) from the scope of the agreement that are bought directly from French and European producers and in sectors that have become more fragile as a result of the COVID-19 crisis. (House plants and flowers from France and the European Union are also excluded from the agreement, as well as French and European lamb);
- Limiting joint purchases in certain product groups (cotton, blue cheese, pasta, cheddar cheese, tomato preserves, etc.) to 15% of the French own-brand product market;
- No longer excluding certain categories of companies from the scope of calls for tender to produce the parties’ own-brand products: SMEs for Carrefour and companies with an annual turnover of less than £3 million for Tesco.
The proposed the commitments are currently under market test up until 9th of November.
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