Casino, Intermarche Probed by EU Over French Supermarket Pact

(Bloomberg) -- Debt-laden French supermarket chain Casino Guichard Perrachon SA was targeted by a European Union cartel probe amid suspicions it colluded with rival Intermarche after the duo teamed up to buy products.

Casino and Intermarche’s owner Les Mousquetaires SAS are suspected of coordinating on how they built out their store networks and set pricing, potentially going "beyond the purpose" of a 2014 joint procurement alliance for branded products, the European Commission said in an emailed statement on Monday. The opening of a probe can eventually lead to hefty cartel fines for companies.

While regulators don’t forbid joint-buying by retailers, such pacts create "multiple contacts” that may lead them to collude on sales activities, the EU warned. It raided Casino and Intermarche in 2017 and again in May. EU cartel rules don’t allow companies to swap commercially sensitive information.

Casino shares rose 0.6% at 12.56 p.m. in Paris trading after falling as much as 3.4% right after the European Commission announcement.

Casino said consumers could see for themselves that there was no anti-competitive agreement that affected the prices they paid. It plans to defend itself against the EU probe, a spokesman said in an email statement. An Intermarche representative declined to comment.

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Casino, which owns the Franprix and Monoprix chains in France, is in talks with banks to extend credit facilities and has agreed to limit future dividend payments as it wrestles with its debt load. As its market share shrinks in France, short sellers have targeted the retailer, saying distressed parent Rallye SA is relying on unreasonably high dividends to survive. Rallye and Casino’s other parent companies obtained creditor protection earlier this year.

To contact the reporters on this story: Aoife White in Brussels at awhite62@bloomberg.net;Albertina Torsoli in Geneva at atorsoli@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Peter Chapman, Christopher Elser

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