France to fine retailer Leclerc over ‘abusive’ commercial practices

© Reuters.  France to fine retailer Leclerc over 'abusive' commercial practices

PARIS (Reuters) – France’s Economy Ministry said on Monday it planned to fine food retailer Leclerc 117.3 million euros ($131.58 million) for “abusive commercial practices” that involved using its Belgian purchasing alliance Eurelec to put pressure on suppliers.

Leclerc, France’s largest retailer by market share, said it was the target of a government campaign, having already been fined 108 million in another case in France.

“By criticizing (Leclerc’s) alliance with other European retailers to make consumers benefit from cheaper prices, French public authorities are in breach of European legislation whose goal is to encourage these exchanges and partnerships,” Leclerc said in a statement.

Leclerc said it was considering appealing to the EU’s European Court of Justice.

The Economy Ministry alleged that Leclerc had bypassed French law via Eurelec.

The ministry said in a statement that Leclerc used Eurelec “to circumvent the French law and impose very significant tariff cuts … to some of its suppliers.”

There have been several purchasing alliances in Europe over the past few years as supermarkets battle to keep prices down to counter fierce competition from rivals as well as the prospect of Amazon (O:AMZN) becoming a rival in food retailing.

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