Carrefour criticised for loss leading

- Last updated on GMT

Related tags: Carrefour, Spain, Supermarket

Carrefour's stores in nine of Spain's autonomous regions have been
accused of selling a range of wine, beer and spirits at less than
cost price, a practice which is illegal under Spanish competition
rules.

Carrefour, the French retail group, is being accused of breaking Spain's strict competition rules by selling a variety of products at less than cost price.

The complaint against Carrefour​ comes from Asedas, the organisation which represents Spain's supermarket retailers, and focuses on Carrefour's alleged loss leading, forbidden under retail regulations.

According to Asedas, to celebrate its 30th anniversary, Carrefour had launched a number of promotional campaigns for spirits, beer and wine over the last few months which effectively offered these products for sale at less than the price the retailer paid for them.

Asedas has brought its complaint before the commercial courts of nine of Spain's autonomous regions - Catalonia, Castilla y León, Galicia, Cantabria, Extremadura, Valencia, Madrid, Andalusia and Castilla-La Mancha.

According to a report in the Cinco Dias​ newspaper, the French hypermarket group has denied that it had a policy of loss leading, and that each case would have to be looked at individually. It did confirm, however, that it was not the first time it had been accused of selling items at below cost price.

Asedas said that it had compared price data from Carrefour's suppliers (many of which are the same for its own members) with the prices of the products on offer in store to determine the level of discounting. The organisation claimed that Carrefour had promoted its offers in bars, cafeterias and restaurants - although not in its own stores - in a bid to attract buyers from the horeca sector who were more likely to buy in bulk.

Asedas highlighted a number of specific cases, according to the paper. For example, Carrefour was alleged to be offering a discount of €3 for the purchase of four bottles of blended whisky such as White Label or Dyc or for the purchase of two bottles of Bacardi or Cacique rum. Both offers, claims Asedas, were loss leaders.

Other promotions criticised by Asedas include a €2 reduction for the purchase of three bottles of whiskies such as Cutty Shark or Jack Daniels and cream liqueurs like Melody, Baileys, Sheridan's and Caballero.

Complaints against the Spanish retail sector for loss leading are nothing new, although most of them have come not from other retailers, as in this case, but rather from the food industry itself. For example, Carrefour was criticised recently by the Spanish food and drink producers' association FIAB for selling its own label olive oil at less than cost price.

Asedas is not only seeking an end to the promotional campaigns which lead to the loss leading at Carrefour, however. It is also keen to ensure that the company is punished for what it claims are repeated infractions - in such a case, the organisation argues, the offending store should be closed by the authorities.

Related topics: Market Trends

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