Belgian competition authority raids retail chains

It was a blue Monday for a hand full of Belgian retailers on 20 May 2019 when the Belgian competition authority (BCA) conducted dawn raids on undertakings active in the retail distribution sector, which – according to the newpaper de Tijd – included Carrefour.

The companies in question are suspected of having engaged in anti-competitive conduct over purchase partnerships for consumer goods.

Such purchase partnerships have been on the radar of the BCA and several other competition authorities for a number of years. Purchase partnerships or buyer alliances among retailers against suppliers (often large global companies) can be good for competition and consumers by creating efficiencies by reducing wholesale or transaction costs.

Such partnerships, however, also present risks for consumer welfare. In 2015, the French competition authority warned of potential coordination behaviour among retailers, facilitated by symmetrical purchasing conditions and information exchanges. Also, the German competition watchdog has conducted a food retail sector inquiry identifying issues with buyer power.

Purchase partnerships, when too powerful, can also exclude potential competitors from the partnership, who in turn obtain less favourable conditions from their suppliers and will struggle to be competitive on the downstream market.

The exact conduct under the BCA's scrutiny is not clear, but this is not the first time that the Belgian distribution sector has come under investigation. In 2015, the BCA settled a hub-and-spoke case among retail chains and suppliers of perfumery, hygiene and drugstore products.

We recommend our readers to install our CMS dawn raid app for immediate assistance in case a dawn raid happens to you. For more information about this eAlert and its implications on the retail market, please contact one of the following local CMS experts:

Kim Gillade, Associate, kim.gillade@cms-db.com

Annabelle Lepièce, Partner, annabelle.lepiece@cms-db.com