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Promarca Criticizes Spanish Supermarkets' Power Over Brands

Published on Mar 18 2016 10:39 AM in Private Label tagged: Retail / Spain / Competition / Promarca

Promarca Criticizes Spanish Supermarkets' Power Over Brands

Spanish brand association Promarca has criticised what it describes as the main food retailers dominating the market through private label offerings.

It said that not only does this diminish the consumer experience, but it creates a situation where food distribution in Spain could be controlled by three giants dictating the rules.

It explained that currently, almost half of market share is dominated by a combination of Mercadona, Dia and Carrefour, and said that the trend will be for this to intensify as the retailers continue to open more outlets.

According to figures published by consulting firm Kantar, Mercadona controls 22.7 per cent of the market, Dia 8.6 per cent, and Carrefour 8.5 per cent. Eroski comes fourth with 6 per cent.

"Perhaps in a year there will only be three brand buyers and that would be very worrying", said Ignacio Larracochea, Promarca's President.

He explained that Promarca’s postion is that this would lead to a decision making process that will be controlled by "very few hands".

He added this would mean that retailers could push their own brands, making it harder and harder for manufacturers to compete and consequently, force many brands to disappear.

Larracochea noted that the biggest brands would survive, but that the small and medium ones are at most risk.

Promarca also claimed that the chains fix a different margin for own brands, making it viable to offer them for cheaper, which is bad for competition.

© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Gabriela Guedez. To subscribe to ESM: The European Supermarket Magazine, click here.

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