I768 - Organized mass distribution: Antitrust launches an investigation against the group purchasing organisation centrale italiana and against 5 competitor retail chains
PRESS RELEASE
PRESS RELEASE
ORGANIZED MASS DISTRIBUTION: ANTITRUST LAUNCHES AN INVESTIGATION AGAINST THE GROUP PURCHASING ORGANISATION CENTRALE ITALIANA AND AGAINST 5 COMPETITOR RETAIL CHAINS TO VERIFY THE EXISTENCE OF A POSSIBLE AGREEMENT WITH POTENTIAL EFFECTS BOTH ON SUPPLIERS AND ON CONSUMERS
This action concerns the chains Coop, Despar, Il Gigante (through its subsidiary Gartico), Disco Verde and Sigma. The measure was brought to the attention of the parties today in the course of inspections carried out in collaboration with the Antitrust Group of the Special Market Protection Unit of the Guardia di Finanza (Italian Tax Police)
At its meeting held on 04th December 2013, the Autorità Garante della Concorrenza e del Mercato decided to open an investigation against the group purchasing organisation Centrale Italiana and against five retail chains that are part of the group (4 of which are members of the organisation Centrale Italiana), operating within the organized mass distribution: this involves the retail chains Coop, Despar, Il Gigante (through its subsidiary Gartico), Disco Verde and Sigma. The investigation was launched to verify the existence of a possible agreement, with potential effects both on suppliers and on consumers.
The measure was notified today to the stakeholders in the course of inspections that were carried out in collaboration with the Antitrust Group of the Special Market Protection Unit of the Guardia di Finanza (Italian Tax Police).
The Centrale Italiana is an alliance between competitor chains in the field of organized mass distribution, set up with the main aim of centralizing negotiations on the conditions and terms of purchase by member organizations to achieve cost savings in the purchase of goods. Out of the five chains involved in the investigation, only Sigma has no shareholding in Centrale Italiana but participates in these arrangements on the basis of a cooperation agreement and mandate signed with Coopitalia.
The purchasing potential of the parties involved in the investigation stands at an average of around 23% of the supply markets: this is an indication of the high degree of market power in relation to producers, reinforced by the territorial distribution of sales quotas by participating firms that is by far above 40% in many local markets.
The investigation must verify whether the alliance reduces the ability of efficient yet contractually weaker producers to compete, with negative effects in the medium term on the variety and/or the quality of products, on efforts at innovation and on investment. Similarly, the investigation will verify the impact on downstream markets of an eventual coordination of sales policies or, at least, of a sharp reduction of incentives to compete: it may be that lower purchase prices obtained on the strength of these joint purchase agreements would not be passed on to consumers. The investigation must be concluded by 28th February 2015.
Rome, 12th December 2013