EU clears Marinopoulos/Carrefour JV - joint venture approved by the European Commission - Brief Article

Eurofood, June 8, 2000

The European Commission has given the green light to the joint venture announced earlier this year by Greek supermarket group Marinopoulos and French retail giant Carrefour (see Eurofood, 13 April 2000, p12). The EU competition authorities decided that the merger of Carrefour's Greek retail operations with those of the local sector leader did not pose a threat to competition, as the Carrefour group already held stakes in two different Marinopoulos operating units -- Hyper-Marinopoulos and Niki -- and as such the deal will not dramatically alter the competition situation of the sector.

Those two units will be bundled with Carrefour Hellas and Continente Hellas, creating an entity with annual turnover of 1.1bn [European Dollar] and some 9 000 staff. Its share of the Greek food retail market will be approximately 20%, not too threatening in view of the weak concentration of the sector as whole. Far less consolidated than in many EU Member States, the Greek retail market offers Carrefour stiff competition in the shape of Sklaventis, Vasilopoulos and Veropoulos.

JV WITH DELHAIZE UNDER REVIEW

Meanwhile, Belgian retailer Delhaize "Le Lion" is in talks with Carrefour over the future of their 50-50 joint venture supermarket chain P. G., which has 50 stores in northern France. Delhaize chief executive Pierre-Olivier Beckers said that a possible conflict of interests had emerged since Carrefour merged with Promodes, which owns a 27.5% stake in Delhaize's closest competitor in Belgium, GB, majority owned by the GIB Group. Becker forecast that one of the partners would buy out the other, if talks conclude the partnership is not viable in the long term.

1ST PRICE A BIG HIT IN BRAZIL

Further afield, Carrefour is proving a hit in Brazil, especially since it started introducing a new discount strategy called 1st Price to help it better compete with local player Pao de Acucar, with whom it is currently vying for market leadership. The new strategy allows customers to buy a limited range of goods at a 40% discount. The products are purchased by Carrefour from smaller producers, and they range from rice and beans to personal hygiene items and cleaning products. There are currently 400 items in the 1st Price scheme, and Carrefour is hoping to increase this to 560 by the end of 2000.