Revised competition rules regarding cooperation agreements, which came into effect on July 1, 2023, provide the legal framework for alliances in retail and wholesale in Europe, according to EuroCommerce.

Numerous benefits

Christel Delberghe, Director-General of EuroCommerce, the organization representing European retailers and wholesalers, commented: "The revised horizontal guidelines state the numerous benefits that joint purchasing brings to consumers and the industry, including better prices, choice, efficiency, and innovation.

"They also confirm that retail and wholesale alliances can be established in various ways and engage in different activities – from joint sourcing to common negotiations of terms and conditions – to help retailers and wholesalers negotiate and bring better prices to households."

The new rules recognize the value of pooling demand to counter the market power of major suppliers and as a means to strengthen competitiveness and resilience, he added.

The value of tough negotiation

The revised rules also emphasize the value of tough negotiation for consumers, as they provide guidance on what can and cannot be done when negotiating with suppliers.

European retail and wholesale alliances deal with a small number of powerful global producers dominating certain product categories with their "must-have" products and enjoying net margins of 15-30%, or ten times higher than those of retailers, EuroCommerce mentioned.

Delberghe added: "These new guidelines offer important clarity and recognition for retail and wholesale alliances, which support a diverse retail and wholesale sector as a key contributor to the daily lives of EU citizens.

"Alliances help rebalance the distribution of economic power for the benefit of consumers and mitigate the negative effects of territorial supply constraints, often imposed by global suppliers, which fragment the single market and cost EU citizens at least €14 billion each year."