Buying groups - Retail Alliances Survey for DG Competition - Results

EU – Competition in the Food Supply -Oct.2009

EU – Competition in the Food Supply -Oct.2009

AIM SURVEY ON RETAIL ALLIANCES Provide DG Competition with insights / data on the functioning of retail alliances  « do they harm the competitive process »? affect « competitiveness of food supply » (price, innovation)?

Negotiate rebates for services ? Negotiate product specifications ? Do Alliances…. Negotiate rebates for services ? Negotiate product specifications ? Ranging from 92% to 74% per alliance Ranging from 96% to 77% per alliance in % of all mentions across alliances

international alliances are essentially selling groups « In the grocery industry, the negotiation of overrider or rebate payments is actually the primary function of some buying groups…the key to securing concessions from suppliers. In such cases, the term ‘negotiating group’ or ‘roof organisation » might be more appropriate » IGD Report - Buying Groups

Do alliances provide marketing services for their members? Ranging from 86% to 50% per alliance in % of all mentions across alliances

Services provided: Business continuity «Reaching an agreement with the alliance is granting business continuity rather than a pre condition to start selling » « Failure to engage with the alliance has led to punitive action in the form of delisting and cancelled promotions at member, national level » Ranging from 93% to 89% per alliance « if there isn’t a global contract there is no local negotiation and no contract » « local negotiations are frozen until an agreement is reached with the alliance. Innovations and promotions are boycotted » in % of all mentions across alliances

Have you been subject to delisting or threat of delisting by one or several members of alliances? Ranging from 78% to 35% per alliance Pressure exercised regardless of size of companies 74% of companies have been exposed at least once by one alliance

Exercise of Buying Power > transfer of excessive risks & unexpected costs UK GSCOP “Need for certainty as regard the risks and costs of trading , particularly in relation to production, delivery and payment issue”

Services signed for … in % of all mentions across alliances

Value to your business of the services provided Ranging from 24% to 42% per alliance Ranging from 8% to 18% per alliance Ranging from 42% to 52% per alliance in % of all mentions across alliances

When are rebates paid? Others w/settlement next year end of semester after services delivered per installments in % of all mentions across alliances

Of the total rebates, what % correspond to measurable counterparts in 2010? Ranging from an average of 36% to 80% per alliance in % of all mentions across alliances

Have Alliances made other attempt to disrupt business to gain an advantage… Ranging from 70% to 37% per alliance 61% of companies have been exposed at least once by one alliance in % of all mentions across alliances

Have Alliances requested … Payment for services not delivered? Non-service related payment request? Ranging from 73% to 29% per alliance Ranging from 63% to 17% per alliance, 76% of companies have been exposed at least once by one alliance 55% of companies have been exposed at least once by one alliance in % of all mentions across alliances

Have Alliances shared the respective terms and conditions negotiated individually with your company in the different countries Ranging from 35% to 15% per alliance 42% of companies have been exposed at least once by one alliance in % of all mentions across alliances

Have Alliances shared… Their Retail sales price in different channels/ countries? Each other’s price build up/margin? Ranging from 24% to 16% per alliance Ranging from 29% to 21% per alliance in % of all mentions across alliances

The survey respondents 82 % only Brands 2% only PL 16% NA in % of all questionnaires