Distribution businessmen promote alliances between supermarkets to cut their costs

Companies in the distribution sector have been at the center of the target for months. Even from the coalition government itself, they have been accused of benefiting excessively at the cost of raising prices to improve their margins.. But businessmen defend that commerce does not win out of the spiral of prices, but that they are victims of the situation, since their margins are being reduced as a consequence of a higher increase in costs than in the prices at which they sell. They also assure that they are acting as a containment dam.

In a document of proposals for the sector sent by the CEOE to the political parties in the days prior to the elections, the businessmen warn that the initiatives to cap prices would have a “devastating effect, reducing the availability of goods, promoting the black market and increasing the price of these, as well as economic losses of the businesses and all the links of the production chain, which would translate into a negative alteration of the competitive structure of the market in its different formats, in job losses and in the closure of companies.

However, they consider it appropriate to support other types of initiatives such as purchasing alliances, which are agreements between distribution chains to negotiate jointly with suppliers and obtain better prices and conditions.. In his opinion, “they have shown to play a key role in the fight against inflation, allowing wholesalers and retailers to negotiate better prices that are passed on to the final consumer”.

They defend this model as “a means to improve the welfare of consumers due to its favorable effect on competition”. They insist that this type of alliance allows numerous small and medium-sized companies to compete both in assortment and in price and to bring essential consumer goods to all corners of the geography thanks to their support for regional chains.

Brussels endorsement

In addition, the CEOE Commission on Competitiveness, Trade and Consumption highlights that the Joint Research Center of the European Commission positively assessed its work as “a balancing factor that promotes business competition for the benefit of the consumer”.

Although the model has been under the magnifying glass of the EC, which opened two investigations into the AgeCore and Coopernic distributor alliances at a European level, it has recently concluded that no indications of anti-competitive practices have been observed.. Furthermore, both reports note that maintaining the ability of retailers to lower prices to consumers is a key goal of competition policy.

With the endorsement of Brussels, the employers are committed to promoting these alliances and, in parallel, are calling on the next Government to evaluate the regulations that “distort the negotiating capacity of the distribution in relation to its suppliers, so that consumers can obtain the products in the best conditions.”

They emphasize that the effective way to alleviate inflation is to extend the VAT reduction to meat and fish, tax rationalization, and the elimination of administrative costs and “disproportionate and discriminatory” tax charges.