As sun sets on Horizon, Casino and Intermarché establish new alliance

Date : 19 April 2021

Jon Wright

Head of Insight - RA EMEA

Continuing the shifts in membership amongst European buying alliances, Auchan, Casino, DIA, Metro and Schiever have said they are not planning to renew their Horizon purchasing alliance for 2022. Meanwhile, due to these changes and others at AgeCore, Casino and Intermarché have announced the creation of a new alliance.

Horizon to end, by mutual consent

Auchan, Casino, DIA, Metro and Schiever have said they are not planning to renew their Horizon purchasing alliance for 2022, by mutual consent. The companies said that despite achieving ‘their initial objectives’ they had decided to not renew their agreement after three years of working together.

The retailers created two groupings as part of their alliance; Horizon Achats and Appels d’Offres, which included Auchan, Casino, Metro and Schiever, and Horizon International Services, which was made up of Auchan, Casino, DIA and Metro. Announcing the decision not to renew the arrangement, the retailers said they would continue to honour all the obligations agreed with suppliers and partners under the terms of the two groupings until the end of 2021. Following the end of Horizon the retailers said each would ‘seek a purchasing set up that is directly aligned with their own strategic priorities’.

Casino and Intermarché create new alliance

Following the ending of AgeCore and Horizon, Intermarché, which was a member of the former, and Casino, which was part of the latter, have concluded an agreement to establish a buying alliance. The two said the partnership, which would last for five years, 2022 to 2027, would lead to the creation of four joint companies:

  • A food purchasing centre, managed by Intermarché, which will negotiate with major manufacturers on both retailer’s behalf in France. This will cover the buying of ‘big international brands’, but will exclude small and medium enterprises, mid-size companies, agricultural products, and private labels
  • A non-food purchasing centre, which will run by Casino and cover operations in France. Casino will purchase technical goods, textiles, and stationery products as part of this part of the alliance
  • Development of digital marketing, which will see the two combine resources for suppliers. Again, covering France alone, the two will create an online retail media agency that will enable them to market shopper data to offer targeted solutions to suppliers. Both stressed, though, that promotions will continue to be negotiated by each party separately. The solution will rely on the knowledge and skills of Casino-owned RelevanC
  • International services centre will see the two establish a purchasing alliance to ‘offer international services’ to large industrial groups that operate internationally. This will enable them to benefit from their scale across Latin America, Casino, and Europe, Intermarché. This group will focus on a ‘limited number of suppliers’ which have a dominant position in their categories

A final part of the agreement will see Intermarché and its manufacturing division AgroMousquetaires compete for contracts to produce private label products of French origin to the Casino Group. Casino and Intermarché said they would submit their plans to the French Competition Authority shortly to have the alliance effective for 2022 negotiations.

The two companies worked together between 2014 and 2018, before Casino exited to establish Horizon with the other retailers. As such, the two coming back together underlines the fragile nature of the buying alliances and the challenges for suppliers as retailers move between groups.

What now for the remaining retailers?

Following the collapse of AgeCore, now that Edeka and Intermarché have found new partnerships, Colruyt, Conad, Coop Switzerland and Eroski are left alone, while after Horizon, Auchan, DIA and Metro remain without a grouping.

While the remaining members of AgeCore could continue, without the support of Edeka and Intermarché, the alliance’s largest retailers by revenue, they do not have the scale to negotiate as they did before. Meanwhile after Horizon, Auchan and DIA appear to be the most affected, especially the former. Given both these developments it is likely that there will be further moves and alliances between European retailers in the medium term.

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