According to the FCA study on buying power in the trade in groceries, retailers use their firm position with respect to suppliers in several ways that may be considered questionable for sound and effective economic competition. When it comes to their interdependency and complex effects, the practices were deemed to be in a grey zone. The FCA hence finds that there is a clear need for further investigations into the practices of the trade.
Examples of the strong position of the grocery retailers include in particular the use of gratuitous marketing allowances and the transfer of risks to suppliers. Effects that are harmful for competition may also be related to the increasing number of the retailers' own brands (so-called private label products), combined with the strong position of retailers in category management.
The FCA investigated the phenomena related to the use of buying power with questionnaires directed retailers and the food industry. The industries included were the meat processing, bakery, mill and pet food industries. In addition to the responses to the questionnaires, the FCA also used other signals obtained from the market and the studies of the European Commission and the European Central Bank on the structure and practices of the markets considered. The financial situation of the actors and the role of foreign trade were also examined.
The English version of the FCA report
The FCA’s 2012 press release on the topic