RetailAnalysis
19 April 2017
DIA and Eroski establish JV for private labels

Spain-based DIA and Eroski have signed an agreement to establish a new company that will focus on the joint purchasing of private label products.

Joint venture to support offer and drive efficiencies

The creation of the joint venture follows the retailers' previous announcement setting out their plan to establish the company. The new joint venture, in which both companies will hold a 50% stake, will be called Red Libra Trading Services. However, the announcement from the two companies stresses that the ownership structure could change in future to accommodate the possible addition of new members.

The companies have said that Red Libra will be 'responsible for trading private labels with suppliers and the purchase of other materials and supplies they need in order to carry out their activity'. DIA and Eroski have said that the joint venture is aimed at improving both of their private label offers 'to maximise the price-quality ratio for consumers', while also helping to boost efficiency.  The retailers said that Red Libra Trading will not manage the purchasing of eggs, milk, oil and perishable fresh goods and that their sales and marketing strategies will remain separate.

Management team will be divided between DIA and Eroski

The two retailers have said that Red Libra, which will become functional on 24 April 2017, will be led by Susana Pagés de la Peña, who is currently DIA's commercial director for own label. Meanwhile Beatriz Santos, who is presently Eroski's commercial director, has been appointed as non-executive chairwoman. The formation of Red Libra Trading continues the strengthening of the collaboration between DIA and Eroski, which has been evolving since the summer of 2015.

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