AIM, AISE, Cosmetics Europe, and 桃色视频, the associations representing Europe鈥檚 consumer goods industry[1]. welcome a from the French Senate into commercial practices in the grocery supply chain. The report demonstrates the urgent need for action at EU-level to address the increasing challenge of retail concentration, behaviours of cross-border retail alliances, and the consequential negative impact on suppliers and consumers.
One of the most exhaustive investigations into retailer buying power in Europe
Described as one of the most extensive investigations into retailer buying power in recent years, the 402-page French Senate report draws on six months of hearings, inspections and testimony from 189 representatives of authorities, suppliers, retailers and enforcement bodies.
Its findings expose how increasingly concentrated cross-border retail alliances are intensifying pressure on suppliers across European grocery supply chains through opaque structures, coercive commercial practices and international service fees.
While conducted in France, the inquiry highlights structural issues affecting markets across the EU and raises serious questions about whether the current regulatory framework is equipped to address the growing impact of unfair trading practices on the EU鈥檚 competitiveness.
Importantly, the report also recognises the severe limitations of the EU Unfair Trading Practices Directive (UTPD), notably the arbitrary 鈧�350 million turnover threshold, which excludes major international buying alliances from the Directive鈥檚 scope. The report鈥檚 call to extend the scope of the Directive and bring European buying alliances and central purchasing structures fully within its application should form a critical part of the forthcoming revision.
Consumers are paying more while transparency and investment decline
Critically, the French Senate also found that whilst retailers argue growing concentration and purchasing pressure are needed to protect consumers鈥� purchasing power, consumer prices, set by retailers for all goods on their shelves, have increasingly diverged in recent years from the prices negotiated by retailers with suppliers. The Senators found that while negotiated supplier prices rose 6-7 % due to increased input costs, consumer prices tripled, rising to a staggering 19% after 2021.
This demonstrates that widespread claims by retailers that suppliers are responsible for higher prices through so-called 鈥渢erritorial supply constraints鈥漑2] are falsely misleading governments across the EU. It highlights instead how aggressive 鈥減rice wars鈥� on a limited number of products can mask broader price increases, reduce transparency and obscure the real drivers of food inflation. The report further warns that these practices weaken investment, innovation and long-term food security across Europe鈥檚 supply chain.
Growing retailer concentration is deepening imbalances across the supply chain
The imbalance of bargaining power between suppliers and retailers, and their alliances, continues to deepen. FMCG manufacturers鈥� sales typically account for less than 2% of an alliance鈥檚 sales to consumers, while members of a retail alliance can represent more than 10% 鈥� and up to 35% 鈥� of a supplier鈥檚 turnover.[3] At the same time, European retail alliances鈥� share of the grocery retail market has doubled between 2015 and 2024 to reach 59%.[3] The French Senate inquiry further found that:
- retailers can account for between 79% and 94% of a supplier鈥檚 turnover, creating
structural dependency; - suppliers face delisting threats and order reductions of up to 70% in order volumes
during commercial negotiations; - retailers鈥� international service fees can reach up to 40% of a supplier鈥檚 turnover,
with the Senate explicitly questioning both their proportionality and their genuine
commercial utility for industry; - retail alliances exert pressure across the entire value chain, affecting SMEs, mid-
sized companies and farmers alike.
EU action required
The undersigned associations call for an ambitious revision of the Unfair Trading Practices Directive that will truly reflect market reality. This requires a removal of the arbitrary 鈧�350 million threshold and extension of protections to all grocery suppliers; bringing European buying alliances and cross-border purchasing structures fully within the scope of the Directive; and ensuring stronger protection against unfair trading practices and abusive commercial demands to deliver fairness for all participants in the
Single Market.[4]
The EU must consider robust mechanisms that effectively prohibit coercive commercial practices by retailer alliances, address the regulatory gaps surrounding cross-border retail alliances, and ensure strong and consistent enforcement at EU level.
[1] Europe鈥檚 Fast-Moving-Consumer-Goods industry is the third largest manufacturing sector in the EU, and the first when taking into account all primary production suppliers, comprising 300,000 enterprises. Categories cover: Food, Beverages, Home Care, Personal Care, Tissue & Hygiene, Pet Care.
[2] For a look at some of the flawed assumptions behind the narrative on TSCs, see AIM鈥檚 detailed input to the European Commission鈥檚 Call for Evidence .
[3] Euromonitor; annual reports. Revenue share of retailers in Service Alliances of the total grocery retail market. Based on revenues of grocery retailers in Germany, Netherlands, France, Belgium, Sweden, Spain, Italy, Portugal, Czech Republic, Poland and Switzerland. Focus on Service Alliances negotiating primarily with A-brands, not only private label.
[4] Read 桃色视频’s鈥檚 full position on the UTPD revision here.
