November 4, 2019 / 10:56 AM / 17 days ago

Casino, Intermarche's buying tie-up focus of EU antitrust probe

FILE PHOTO: A logo of French retailer Casino is pictured outside a Casino supermarket in Nantes, France, July 20, 2017. REUTERS/Stephane Mahe/File Photo

BRUSSELS (Reuters) - French supermarket groups Casino (CASP.PA) and Intermarche are being investigated under an EU antitrust inquiry over a buying alliance formed five years ago which regulators said could have been used to illegally coordinate their actions.

The move, announced by the European Commission on Monday, followed dawn raids of the supermarkets in February and May this year. Casino’s shares fell on news of the EU investigation.

Casino and Intermarche set up their purchasing alliance in France in 2014 but it was dissolved last year when Casino and France’s Auchan AUCH.UL sealed a global buying deal.

Casino said it would defend itself. “The absence of any anti-competitive agreement, particularly on resale prices, was noted by the market as a whole and by consumers during the period of investigation,” a spokesman said.

Intermarche had no comment after the investigation was launched.

The Commission can fine companies up to 10 percent of their global revenue for breaching EU antitrust rules.

Buying tie-ups have sprung up in recent years as supermarkets use the tactic to counter rivals offering price discounts and online retail giant Amazon (AMZN.O).

The Commission said it was concerned that Casino and Intermarche went beyond the purpose of their alliance and engaged in an anticompetitive conduct.

“Such (lower prices) benefits can however disappear quickly if retailers use these alliances to collude on their sales activities,” European Competition Commissioner Margrethe Vestager said in a statement.

Reporting by Foo Yun Chee, additional reporting by Dominique Vidalon in Paris; Editing by Alison Williams

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