Revised competition rules on cooperation agreements, which entered into force on 1 July 2023, provide the legal framework for retail and wholesale alliances in Europe, according to EuroCommerce.
Christel Delberghe, director general of EuroCommerce, which represents retailers and wholesalers in Europe, commented, "The revised horizontal guidelines affirm the many benefits that joint buying brings to consumers and industry, including better prices, choice, efficiencies and innovation.
"They also usefully confirm that retail and wholesale alliances may be set up in various ways and engage in different activities – from joint sourcing to joint negotiations of terms and conditions – to help retailers and wholesalers negotiate and bring better prices to households."
The new rules recognise the value of pooling demand to countervail the market power of large suppliers, and as a means to strengthen competitiveness and resilience, it added.
Value Of Hard Bargaining
The revised rules also reiterate the value of hard bargaining for consumers as they offer guidance on what can and cannot be done when negotiating with suppliers.
European retail and wholesale alliances deal with a small number of powerful global manufacturers who dominate certain product categories with their 'must-have' products and enjoy net margins of 15% to 30%, or ten times those of retailers, EuroCommerce noted.
Delberghe added, "These new guidelines provide important clarity and recognition to retail and wholesale alliances, which support a diverse retail and wholesale sector as a key contributor to EU citizen’s life every day.
"Alliances help to rebalance the distribution of economic power for the benefit of consumers and mitigate the negative effects of territorial supply constraints, often imposed by global suppliers, which both fragment the single market and cost EU citizens at least €14 billion each year."
© 2023 European Supermarket Magazine – your source for the latest supply chain news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
