Intermarché probed over price war

SUPERMARKET chain Intermarché is facing investigation by France's competition watchdog and a potential fine of up to €2million over claims it put undue pressure on suppliers to slash their prices.

The food group confirmed in a statement that the anti-fraud body DGCCRF has been in contact, after the French finance ministry ordered an investigation into its contractual terms with farmers and other food industry suppliers.

Le Figaro newspaper, which broke the story, said supply chain managers at Intermarché required a guaranteed profit margin of at least 3.5% on all goods supplied by wholesalers, even if the supermarket entered into a price war with rivals Leclerc, Carrefour, Auchan and Géant.

The DGCCRF is also investigating claims that Intermarché demanded lower prices from suppliers without offering any guarantees in return, such as minimum volume. The group is also accused of adding terms to its contracts requiring unsold goods to be sold back to the supplier, and harsh penalties for lateness.

Intermarché has refused to comment publicly on the case. An initial meeting with competition authorities is scheduled for mid-May.

Economy minster Emmanuel Macron said: "There is a lot of pressure in this sector. Producers are under pressure and some parts of the supply chain are suffering a lot, with a knock-on effect on jobs."

The two biggest federations representing the French food sector wrote an open letter to the government asking it to intervene to put a stop to the extreme pressure they said suppliers faced when dealing with the big hypermarket and supermarket groups.

Le Figaro says other food retailers are also facing investigation but have yet to be formally contacted, as there is not sufficient evidence to date.