24 Nov 2014
German METRO Group and French Groupe Auchan recently announced an international purchasing partnership that established two agreements between the groups. The partnership is the first of its kind and aims to compliment each others’ strengths to create synergy. The two agreements are as follows:
- International cooperation agreement: Joint negotiations on specific services for international manufacturers of branded consumer products. Both Auchan and METRO aim to get greater bargaining power over large multinational manufacturers.
- International sourcing agreement: An agreement to enable joint worldwide purchasing of non-food products. Each company will then resell these products individually under its own private label. The products are predominately sourced in Hong Kong and Shanghai from suppliers located in Asia or Eastern Europe.
CEO of METRO stated “we want to use the strengths of both organizations to capture maximum synergies towards our common suppliers and generate cost savings, which we can then pass on to our customers”. This partnership is unique as it’s combining the bargaining power of a leading wholesaler with that of a leading retailer.
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