Announced in January 2016 was that UK retailer Asda, part of the Walmart Group, has become the newest member of EMD, one of the largest buying groups in Europe with a presence in 15 countries. Asda aims to increase its purchasing power and gain significant savings from its supply chain, which it will reinvest in lowering prices and further improving product quality.
And despite ongoing issues and criticism since 2014 of French supermarkets buying alliances, French retailers Auchan and Systeme U submitted their buying merger proposal in January 2016 to the French antitrust authority. The Autorité de la Concurrence has investigated the purchase alliances created by several large French distributors and feels “wholesale would be better off adjusting the purchase agreements to let competitiveness reign”.
The planned merger of the Ahold and Delhaize US business gained momentum in January after the two European supermarket majors revealed the public filing by Ahold of a registration statement on Form F-4 with the US Securities and Exchange Commission, required under US law.
In June 2015, The Netherlands’ major grocer Ahold agreed to take a 61% stake in a new company and buy Belgian rival Delhaize in a 25 billion-euro (US$28 billion) deal to create Europe’s biggest listed food retailer by market capitalisation and one of the largest food retailers in the United States with a 5% market share.
And one of Europe’s main private label platforms has been created in late 2015 after Group Casino of France announced the ICDC Services joint venture, with Spain’s DIA Group. The two supermarket and discount store groups decided to join forces internationally to boost their competitiveness relative to major suppliers of national brand food products.
The partners said they will offer suppliers access to a unique portfolio of global services (e.g., data sharing, country development assistance, etc.) while combining their expertise and the synergies that exist between their geographic locations and store formats. The move should open up additional markets to existing suppliers.
In addition, the partners have agreed to coordinate purchasing negotiations for their private-label brands in Europe, with the aim of ultimately pooling around 50% of volumes.
The alliance will take effect, subject to the approval of the relevant competition authorities (where needed), starting with the 2016 round of purchasing negotiations, via a new joint venture, ICDC Services.
It will be created in addition to the two Groups’ existing purchasing partnership agreements, which will remain unchanged.
DIA operates over 7,000 stores globally, including discount and supermarket formats, while Casino operates over 14,000 stores globally, including food store banners such as Casino, Monoprix, Monop and Franprix.