Evaluating supermarket power: Carrefour promodes

Résumé du document

In recent years, large buyers that had previously been in fragmented industries have increased their purchasing power through mergers and acquisitions. This change has placed more importance on the topic of limiting bargaining power and preserving free competition in the market. As a result, the European Union has become increasingly involved assessing the approval of mergers and acquisitions within their jurisdiction. In order to promote free competition, several laws have been established. In respect to mergers and acquisitions, European Union created the European Commission and gave it the responsibility to enforce these rules on a case-by-case basis by closely working with European national governments. As a means to understand EU competition policies, the following paper will seek to comprehend the reasoning and implementation of EU regulations by specifically examining the case study of the merger between Carrefour and Promodes.

Extraits

[...] The European Commission noted that by approving this merger, the new Carrefour/Promodes group would be the leading French competitor in this market segment. The new company would also be able to cover nearly all consumers in every territory. By considering these facts, the European Commission that several factors suggest the existence of a downstream market that extends further than the local level. VI. Legal Issue The impact on buyer power was the central concern of the European Union's examination of this case. [...]

[...] Meanwhile, Carrefour opens its first supermarket in Belgium. 1972: Promodes supermarkets adopt become known as Continent. Additionally, the convenience store chain Shopi became part of Promodes. 1977: Promodes continues to expand their presence in the convenience store sector by creating the chain 8 à Huit. 1981: Carrefour develops its own credit card: the Pass Card. This allowed the company to increase its market power by establishing a larger consumer fidelity basis. During the same year, Promodes expands by franchising with Champion supermarkets. [...]

[...] Evaluating supermarket power: carrefour promodes Evaluating Supermarket Power In recent years, large buyers that had previously been in fragmented industries have increased their purchasing power through mergers and acquisitions. This change has placed more importance on the topic of limiting bargaining power and preserving free competition in the market. As a result, the European Union has become increasingly involved assessing the approval of mergers and acquisitions within their jurisdiction. In order to promote free competition, several laws have been established. [...]

[...] The following section will further outline, define the facts examined in these two categories, and articulate the relevant concerns of the European Commission in regards to this proposal. Relevant Product Market The French authorities were requested to reference activities related to the distribution of products similar to those similar of Carrefour and Promodes in order to form an idea of the everyday consumption of consumers in the market segment. The Commission had previously had the opportunity of considering similar cases that had a distinct market corresponding to the distribution of food and convenience products. [...]

[...] This is a relevant conclusion because it enables the separate company activities and operations to be considered as separate and therefore not show the companies as such a large threat to competition. Geographical market The European Commission also requested the French authorities to provide a summary of both of the companies' local distribution within their relevant geographical markets. Based on French guidelines, each distribution territory is divided into a number of local markets that cover various dimensions. Each market segment was shown to have a distinct market inside the concerned Member State. [...]