Eurelec Trading, the sourcing organisation of French E. Leclerc and German Rewe Group, is stepping up its efforts to negotiate the biggest possible number of international brand suppliers. As reported by Lebensmittel Zeitung, the mid-term goal is to reach a trading volume of EUR15-20bn with more than 50 brand manufacturers, building on the current volume of EUR3bn. The paper has learned that the next tranche of suppliers should be added from 1 January 2018.
Currently Eurelec is negotiating the buying conditions for France and Germany, primarily with multinational companies. Initial exploratory talks are also being held with smaller international markets overseas. In addition to the Eurelec discussions, international suppliers continue to be asked to attend meetings with Coopernic, the alliance of E. Leclerc, Rewe Group, Coop Italia and the merged Ahold Delhaize.
Calling Eurelec a buying group doesn’t fully reflect its role and scope. Eurelec – the slightly strange name (at least to German ears) which stands for Europe-Rewe-Leclerc – functions as a wholesaler at a European level. This is something new, even by European standards. Brussels-based Eurelec Trading essentially works as an international wholesaler with a buying department and a clearing centre for its two members to whom it sells on its goods.
It is a bottleneck through which the brand suppliers in question need to go through before further concrete negotiations will be held at a national level. That means hard dealing; and anyone who is concerned about cartel issues arising from the structure will be told that, according to the retailers, these have been cleared due to its co-operative setup.
For E. Leclerc and Rewe Group, both co-operative groups of independent supermarket operators, the intention is clear. They don’t want to be left behind in building scale as the likes of AMS, EMD and Carrefour World Trade do the same. Coopernic is good, but you can still make it bigger, the thinking goes. Following quarrels that led to E. Leclerc temporarily leaving Coopernic at the end of 2013, the two French personalities Michel-Edouard Leclerc and Alain Caparros, CEO of Rewe Group, were obviously professional enough to find common ground again.
Against a backdrop of an increasingly challenging retail market, in which context both Leclerc and Caparros explicitly reference Amazon, they want to form nothing less than the “Airbus of retail” – this is how Leclerc described the Franco-German co-operation in the French paper Les Echos. So, expect something big! It is true that Caparros will leave Rewe Group at the end of this month. But there won’t be any communication problems – at least not language-wise since his successor Lionel Souque is a Frenchman himself.