Source: European Union
The European Commission has opened a formal antitrust investigation to assess whether two French groups of retailers, Casino Guichard-Perrachon (known as ‘Casino’) and Les Mousquetaires (known as ‘Intermarché’), have coordinated their conduct in the market, in breach of EU competition rules.
Commissioner Margrethe Vestager, in charge of competition policy, said “Buying alliances between retailers have become a key component of grocery supply chains. They can bring lower prices to consumers for food and personal care brands that they purchase on a daily basis. Such benefits can however disappear quickly if retailers use these alliances to collude on their sales activities. The Commission will therefore investigate if Casino and Intermarché have coordinated their activities in an anticompetitive way.”
Casino and Intermarché are two of the largest chains of groceries retail shops active in France. In November 2014, they set up a joint venture for the joint procurement alliance of their branded products, INCA.
The Commission is concerned that Casino and Intermarché went beyond the purpose of their alliance and engaged in an anticompetitive conduct. In particular, the Commission will investigate whether Casino and Intermarché coordinated their activities on the development of their shop networks and their pricing policy towards consumers.
If proven, this coordination may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union).
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
In February 2017 and May 2019, the Commission carried out unannounced inspections at the premises of Casino and Intermarché, as part of its own-initiative inquiry into possible collusion between retailers through purchasing alliances.
In its Guidelines on horizontal cooperation agreements, the Commission notes that this type of buying alliances usually aim at the creation of purchasing power, which can lead to lower prices or better quality products or services for consumers. To the extent that such benefits are passed on to consumers, retailers’ alliances may have a positive effect.
However, alliances can also give rise to competition concerns. Notably the multiple contacts between retailers can lead them to collude on their retail sales activities. Market developments in recent years, such as the growth in number of alliances and the changes in partners in alliances, have enhanced the opportunities and risks of such collusion.
The present investigation is part of the Commission’s efforts to ensure that modern grocery retail delivers benefits to consumers.
Background on antitrust investigations
Article 101 of the Treaty on the Functioning of the European Union prohibits agreements and concerted practices which may affect trade and prevent or restrict competition. The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by national competition authorities.
Article 11(6) of the Antitrust Regulation provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to also apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions which would conflict with a decision that would conflict with a decision contemplated by the Commission in proceedings it has initiated.
The Commission has informed the companies and the competition authorities of the Member States that it has opened proceedings in this case.
There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the exercise of the rights of defence.
More information on the investigation will be available on the Commission’s Competition website, in the public case register under the case number AT.40466.