European supermarket giants Carrefour and Tesco have ended a three-year purchasing agreement that was leveraged to joint source private brand products to help the retailer’s grow their store brand reach as well as push back on pricing from national brand food suppliers.
Before the agreement, Tesco’s private brand assortment was around half and Carrefour positioned its private brand assortment around 25%.
A brief statement from the company released on June 7 said: “Carrefour and Tesco have today confirmed that they have decided not to extend their purchasing alliance beyond the three-year operational framework agreed in 2018, and the alliance will formally end on 31 December 2021.”
The statement went on to say that Carrefour and Tesco “benefited from a number of joint buying opportunities across food and general merchandise categories, enabling access to new suppliers, new sources and new products. Moving forward, both companies have agreed that they will continue this work independently and focus on their own opportunities, building on the experience and the progress made during the alliance period.”
An article in Reuters on the breakup said in December 2020, France’s antitrust authority placed tougher conditions on the purchasing agreement, alleging it hurt small suppliers of private label, which could have had an impact on the agreement, as could’ve Britain’s exit from the European Union making things more complex. Read the Reuters story here.