Wednesday, April 29, 2015
Philippe Chauve and An Renckens, DG Competition ask The European Food Sector: Are Large Retailers a Competition Problem?
ABSTRACT: Concerns have emerged about the extent of retailers’ bargaining power vis-à-vis their suppliers as retailers have become more concentrated, have joined forces in buying alliances, and have significantly developed their own brands (private labels). To address these concerns, several EU Member States have put in place laws on fair trading and/or modified their competition laws, obliging the competent authorities to scrutinise and (if necessary) sanction retailers’ business practices. The ‘modern retail study’ recently published by the European Commission sheds light on the matter as it puts forward empirical evidence that innovation is more likely to be hampered by highly concentrated food manufacturers than by powerful retailers—even if further investigation is needed to assess highly concentrated retail markets and situations where shop assortments are dominated by private labels.