EU antitrust authorities announced they are assessing whether two of France’s largest grocery chains coordinated in breach of EU competition rules, says MarketWatch.
The two retailers in question are Casino Guichard Perrachon SA and rival Intermarche.
The development follows unannounced inspections of Casino and Intermarche's premises in May by an EU commission. Casino and the owner of Intermarche, Les Mousquetaires SAS, are suspected of going beyond a joint procurement in 2014 by building their store networks and setting pricing.
“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," says Commissioner Margrethe Vestager, in charge of competition policy. "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.”
As a result, the probe could lead to hefty cartel fines for the companies, reports Bloomberg.
Regulators do not forbid joint-buying by retailers. However, such pacts make “multiple contacts” that may lead them to collude on sales activities, said the EU.
After the announcement, Casino shares fell as much as 3.4% in Paris.
Casino said consumers could see that there was no anti-competitive agreement that affected the prices they paid. A spokesperson reportedly said that the company plans to defend itself against the EU probe.