Carrefour and Tesco must give smaller suppliers access to their joint own-brand tenders under commitments made binding by France’s competition authority on December 17, 2020. The decision also removes some products from the purchasing alliance and limits joint buying in other categories. It changes who can compete for supermarket supply contracts without ending the retailers’ cooperation. [A1]
The August 2018 agreement lets either Carrefour or Tesco run a tender on behalf of both retailers for production of their own-brand goods. The authority said it initially covered more than 130 product families, from fruit and vegetables to cling film and paper towels. A manufacturer responding to a joint tender is competing to make goods for both retailers. [A1]
The October 8 proposal shows which suppliers faced an eligibility barrier. It offered to stop excluding small and medium-sized enterprises for Carrefour and businesses with annual turnover below £3 million for Tesco from the relevant tenders. Those proposals were then open to third-party comments. The December decision makes restoring the smallest suppliers’ ability to bid binding, ending the blanket exclusion of these supplier groups at the outset. [A1][A2]
The authority’s concern was how concentrated purchasing could affect businesses already operating with little contractual protection. Its investigation described short contracts, no exclusivity and no retailer volume commitments, alongside relatively low supplier profitability. It warned that further pressure on suppliers’ margins could reduce their ability or incentive to invest and innovate. That was a competition risk identified by the regulator, not a finding that every participating supplier had already cut investment. [A1][A2]
The final package excludes fruit and vegetable products bought mainly from French and European producers. It also limits cooperation in eight product categories, including cotton, blue cheese and fresh cheese. The retailers remain free to cooperate in the other categories. [A1]
The commitments run for five years, with compliance checked by a trustee authorised by the competition authority. For a smaller manufacturer, the immediate change is access to a tender it could previously have been excluded from. The announcement does not promise a contract award, a minimum order volume or longer supply terms. [A1][A2]
Source documents
- Autorité de la concurrence: Carrefour and Tesco commitments made bindinghttps://www.autoritedelaconcurrence.fr/en/communiques-de-presse/autorite-issues-new-decision-concerning-purchasing-offices-and-makes
- Autorité de la concurrence: Carrefour and Tesco propose commitmentshttps://www.autoritedelaconcurrence.fr/en/communiques-de-presse/purchasing-offices-carrefour-and-tesco-propose-commitments