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Edeka complains about price scams by global brand manufacturers

“Completely exaggerated price increases”
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Edeka accuses global brand manufacturers of price scam

Everyone complains about the high prices. But this is not only due to the high prices of raw materials and transport costs, says the boss of the retail giant. He sees an answer to this in the retailers’ international purchasing alliances.

Germany’s largest grocery retailer Edeka complains about price scams by global brand manufacturers. “It is not uncommon for completely excessive price increases to be requested, often for no understandable reason,” Edeka boss Markus Mosa told the German news agency on Thursday. Mosa is not alone in criticizing. Rewe boss Lionel Souque had also made similar statements in recent months.

Not all of the recent retail price hikes are due to rising commodity prices and transportation costs, Mosa said. Global brand manufacturers have continued to use their market power in purchasing deals with retailers. nationals to increase their profit margins. Manufacturers also regularly threaten to stop deliveries.

“Unfair industry practices mean that brand manufacturers have not only been able to strengthen their profit margins, but have even expanded them continuously,” said Mosa. The high returns on sales of global brand manufacturers in the range double-digit percentage speak for themselves here.

A counterweight to the market power of the global brand industry are international buying groups in retail, the manager said. They have increasingly allowed retailers to trade on an equal footing. The winners are the consumers who benefit from lower prices.

Mosa referred to a recent Insead business school study on the influence of the Agecore international purchasing alliance, of which Edeka was also a member. According to this, in the period from 2014 to 2019, customers paid around 12% less for products purchased through the purchasing alliance than they would have been without Agecore. In individual product categories such as frozen foods, the savings would have been as much as 36%. However, the purchasing alliances of European grocers are not without controversy due to their concentrated purchasing power.

Edeka is currently a member of the Epic trading alliance, which replaced Agecore. In addition to Edeka, its members include the Swiss retail group Migros, the Swedish retailer ICA Group and the Dutch start-up Picnic. The competitor Rewe, on the other hand, belongs to the Coopernic and Eurelec purchasing alliances.

(boot / dpa)

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