Background

On 4 December 2013 the Italian Competition Authority (ICA) opened an investigation into one of the Italian largest joint purchasing groups, Centrale Italiana.

Following the completion of the investigation, the ICA considered that the agreements between Centrale Italiana and its members, namely Coop Italia, Despar Servizi, Gartico, Discoverde, and Sigma, infringe Article 101 of the Treaty on the Functioning of the European Union.

In order to address the competition concerns raised by the ICA, Centrale Italiana and the supermarket chains concerned submitted commitments, which were approved by the ICA on 17 September 2014, following the analysis of comments from interested parties.

ICA's concerns

The ICA held that Centrale Italiana operates as a horizontal agreement between its members having as its main object the coordination of the negotiations of purchase agreements with suppliers of the supermarket chains. According to the ICA's opinion, Centrale Italiana increases the buyer power of its members and this causes negative effects on competition in both the upstream purchasing markets and downstream resale markets.

Commitments

The ICA considered the commitments submitted by Centrale Italiana and its members able to address the competition concerns because they include:

  • termination of Centrale Italiana by December 31, 2014 in order to avoid further joint purchases carried out by Centrale Italiana on behalf of its members
  • termination of any commercial cooperations between Centrale Italiana's members, and
  • amendment to the cooperation agreements entered into between Coop Italia and Discoverde and Sigma in order to limit the joint negotiations only with those suppliers
    • with an overall turnover exceeding € 2 million, and
    • that are not private label manufacturers,  since the combined market shares of these three supermarket chains is below 20% in the upstream procurement markets.

What to do

Companies are recommended to take part to trade associations or joint organizations (eg Centrale Italiana) together with their actual or potential competitors or companies active in the upstream or downstream markets only following an in-depth assessment of their scope and activities under competition law.

Furthermore, potential or actual competitors are recommended to avoid entering into any joint purchasing or selling agreements without the prior confirmation of their compliance with competition law.

Lastly, if a competition authority considers that an infringement of competition law is taking place, companies are highly invited to take into account the opportunity to submit commitments due to their potential benefits and the opportunity to customize them to address any competition concerns.

Alice Galbusera