Agreement will not be extended beyond 31 December as companies agree to “continue this work independently”
Tesco and French-retailer Carrefour will not extend the purchasing alliance the two parties established in 2018, in an effort to cut costs.
In a statement released today, both companies said they has decided “not to extend their purchasing alliance beyond the three-year operational framework agreed in 2018″.
“Moving forward, both companies have agreed that they will continue this work independently and focus on their own opportunities, building on the experience and the progress made during the alliance period,” the statement read.
According to Reuters, the agreement was not triggered by pricing and trade complications brought about by Brexit.
It will formally end on 31 December.
Upon forging the partnership In 2018 Tesco and Carrefour said it would enable them to improve the quality and choice of products available to their customers, thereby enhancing their competitiveness.
In July 2018, the two companies said in a statement: “This agreement will also allow both companies to strengthen their relationships with their suppliers and create significant opportunities for those suppliers.
“Each company will continue to work with supplier partners at a local and national level,” it continued.
In March, Carrefour acquired Brazilian food group Grupo BIG Brasil SA, Brazil’s third-biggest food retailer, for R$7 billion (£977m).
The acquisition is expected to strengthen Carrefour Brazil’s presence in the high growth potential market.
Carrefour reported that sales were up 7.8% in 2020 compared to the previous year, while Tesco’s group sales also grew by around 7.7% YoY (excluding Tesco Bank) during its fiscal year 2020, which covered the 52 weeks to 27 February 2021.
Date published: 7 June 2021