Skip to main content
Agriculture and rural development
Artiklu tal-aħbarijiet13 Mejju 2020Id-Direttorat Ġenerali għall-Agrikoltura u l-Iżvilupp Rurali

Retail alliances in the agri-food supply chain explained and their potential benefits for consumers and suppliers assessed

Published today by the European Commission, the report on ‘retail alliances in the agricultural and food supply chain’ explains the activities of retail alliances, their effect on the food supply chain and the legal framework that may apply to their creation and activities.

Retail alliances are horizontal coalitions of retailers, supermarket chains and cooperative retail groups that work together to combine activities such as collectively sourcing supplies.

Three main types of retail alliances exist: independent retail groups, national alliances, and European alliances. Substantial differences might still exist within these different types. While members of independent retail groups and national retail alliances are usually active in the same national market, members of European retail alliances are active in different national markets. 

In terms of activities of retail alliances, they may differ depending on the type. Independent retail groups will typically buy products jointly, unlike other types of alliances. National and European alliances’ main activities will include the participation in joint tenders and/or the conclusion of agreements with large producers (so-called ‘on-top agreements’). These kind of agreements cover a wide range of services offered by retail alliances to suppliers such as promotional activities or growth plans.

In addition, retail alliances may also support smaller suppliers in developing their network or engage in the joint procurement of not-for-sale products, such as in-store equipment or data sharing services.

Retail alliances can create potential benefits for consumers. By increasing efficiency and providing a counterbalance to large brand manufacturers, retail alliances may lead to lower consumer prices. They might also affect the variety of products offered to consumers. The concrete effects will depend on the nature of the relationship between retailers and suppliers, as well as on the existing competition in the retail market.

In relation to suppliers, retail alliances may lead to increases in efficiency and facilitate market expansion. However, suppliers facing stronger buyers may lead to the lowering of their margins.

Finally, the report presents the legal framework applicable to retail alliances at EU level and provides examples of decisional practice of the European Commission and the national competition authorities.

Background

Following a call from the European Parliament, the Commission launched an analysis of the effects of retail alliances on the economic functioning of the agricultural and food supply chain.

The report draws on a two-day technical workshop that was co-organised by the Commission's Department for Agriculture and Rural Development and the Joint Research Centre in Brussels on 4-5 November 2019 to address the request. The purpose of this technical workshop was to present and discuss the available evidence and the state of knowledge regarding retail alliances, including the potential implications they may have on consumers and upstream operators in the food supply chain, and the legal context in which they operate.

Related links

Agri-food supply chain

Dettalji

Data tal-pubblikazzjoni
13 Mejju 2020
Awtur
Id-Direttorat Ġenerali għall-Agrikoltura u l-Iżvilupp Rurali