Supermarket retailers Carrefour and Tesco said on Monday that they expected their previously-announced purchasing alliance to become operational in October.
The companies first announced the tie-up in July, with French company Carrefour joining up with UK peer Tesco to form a global purchasing alliance to demand better terms from major suppliers, in the latest attempt by the industry to drive down costs.
With combined annual sales of $170 billion, the partnership is designed to secure a better deal from the likes of Nestle, Procter & Gamble, Unilever, Danone and others to help the French and British groups to compete hard on price.
Common Strategies
Announcing the agreement in July, Carrefour CEO Alexandre Bompard said that the alliance “combines the purchasing expertise of two world leaders, complementary in their geographies, with common strategies”.
The alliance will cover strategic relations with global suppliers in areas such as marketing services or data collection as well as the joint purchasing of own-brand products and goods used in their own businesses.
A few weeks after the announcement it was revealed that the French antitrust authority intended to investigate whether several purchasing alliances recently sealed by French and European supermarket retailers threatened competition rules.
Carrefour and Tesco’s partnership was among many other purchasing agreements which were under the scope and has since been given the green light.
The deal will help Tesco dampen the potential surge in costs for raw materials as a result of a Brexit hard border.
News by Reuters, edited by Checkout. Additional reporting by Aidan O'Sullivan Click subscribe to sign up for the Checkout print edition.
