Tesco and French retailer Carrefour have announced their intention to enter into a long-term, ‘strategic’ alliance and is said to cover the strategic relationship with global suppliers.
The alliance is also covers the joint purchasing of own brand products and goods not for resale, which will be governed by a three-year operational framework.
According to Tesco, the alliance will enable both companies to improve the quality and choice of products available to customers, at lower prices.
Each company will continue to work with supplier partners at a local and national level.
Dave Lewis, Tesco group chief executive, said: “I’m delighted to be entering into a strategic alliance with Carrefour. By working together and making the most of our collective product expertise and sourcing capability, we will be able to serve our customers even better, further improving choice, quality and value.”
Alexandre Bompard, chairman and CEO of Carrefour Group, added: “This strategic alliance between Carrefour and Tesco is a major agreement as it combines the purchasing expertise of two world leaders, complementary in their geographies, with common strategies.
“This agreement is a great opportunity to develop our two brands at the service of our customers.”
Frank Woods, retail sector specialist at The National Farmers Union (NFU) Mutual, has expressed some concern regarding the deal.
He said: “The deal with Carrefour may be a result of having been caught on the hop by the proposed Sainsbury/Asda merger.
“Undoubtedly there will be some additional pressure on producers as a result. The larger buying group will seek to leverage its buying power, but some of the savings that consumers can expect to see will come from greater efficiency, as they will be able to de-duplicate buying processes.
“On the plus side, it may also provide additional distribution for existing Tesco suppliers, who will now see their products on the shelves in Europe, and for UK consumers, more European products in Tesco.”
It is anticipated that the alliance will be formally agreed within the next two months.