ECN Brief

Italy | ICA Accepts Commitments from Supermarkets to Halt Purchasing Alliance in Retail Sector

Italy | ICA Accepts Commitments from Supermarkets to Halt Purchasing Alliance in Retail Sector

On 17 September 2014, the Italian Competition Authority (ICA) closed an investigation into an alleged infringement of Article 101 TFEU by five retail chains after it accepted and made binding the commitments proposed by the undertakings to put an end to their alliance, whose main role was to negotiate their procurement conditions with suppliers.

The investigation was initiated on 4 December 2013 against the purchasing organisation, Centrale Italiana, and five retail chains operating common procurement conditions  – i.e. Coop, Despar, Il Gigante (through its subsidiary Gartico), Disco Verde and Sigma. Out of the five retail chains involved in the investigation, only Sigma has no shareholdings in Centrale Italiana, but participated in the alleged anti-competitive arrangements on the basis of a cooperation agreement and mandate signed with Coop Italia.

According to the investigation, the purpose of the alliance Centrale Italiana was to centralize negotiations on the conditions and terms of purchase for its members (retailers), so as to achieve cost savings for their purchase of goods. The market shares of the parties involved in the alliance account for 23% of Italy’s upstream procurement market and around 40% on the downstream retail markets in some local areas.

The binding commitments consist not only of terminating the commercial negotiations by Centrale Italiana on behalf of the involved distribution chains from 2015 onwards, but also of the interruption of any form of commercial cooperation between the five retail chains. Moreover, the existing joint purchasing agreements between Sigma and Coop Italia and Disco Verde and Coop Italia will be completely restructured. The two smallest Italian retail chains, Disco Green and Sigma, will be able to continue to negotiate a part of their purchases with Coop Italy, the strongest retail chain in Italy. However, the joint negotiations will only be allowed when it concerns suppliers whose turnover exceeds € 2 000 000 and who are not suppliers of private label products, so as to reduce the risk of coordinated behaviour in respect of products that play a pivotal role in competition between retail chains. Coop, Despar, and Il Gigante have committed to stopping their cooperation, as the ICA considered that their retail activities overlap at local level and present a high risk of anti-competitive coordination.

See further here.

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