Trade publication Lebensmittel Zeitung has reported that Edeka is to leave the AgeCore buying alliance. The step follows its establishment of the Everest alliance with Netherlands-based, pureplay retailer Picnic.
Short term uncertainty likely to be resolved in 2021
Although Edeka’s departure has not been completed, as talks are on-going about the sale of its shares, if it is confirmed it would leave AgeCore’s short term viability under question. Edeka leaving AgeCore makes the appointment of Gianluigi Ferrari, who was AgeCore’s chief executive until his departure, as the chief executive of Everest more understandable.
Edeka dominates AgeCore’s combined revenue figure of about €160 bn, accounting for about 40% of the alliance’s total. As local rival Rewe is a member of Coopernic, discounters Aldi and Lidl unlikely to join such an organisation and Kaufland part of EMD, finding a replacement in Germany will be challenging. Edeka leaving AgeCore will, therefore, likely lead to the alliance’s dissolution, leaving its other members, Colruyt, Coop Schweiz, Conad, Eroski and Les Mousquetaires looking for new homes.
Everest to fill short term hole for Edeka
In the short term the buying alliance between Edeka and Picnic will enable the former to continue to benefit from the increased buying power of the two companies. However, it will likely put a greater focus for Everest on attracting new members, which has been on the agenda since it was first announced by Picnic co-founder Michiel Muller. While members of AgeCore could follow Edeka to Everest, the reasons for why Edeka felt it needed to leave AgeCore means that this might not be possible.
With the Tesco-Carrefour buying alliance and the first term of the Horizon grouping both coming to an end in 2021 there is the potential for several large-scale changes to the membership of Europe’s buying alliances. Edeka’s exit from AgeCore could, therefore, be the first of several moves that could occur during the year.
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