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French grocers Auchan, Casino in talks for purchasing alliance

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Casino Guichard Perrachon SA and Auchan Retail are in exclusive talks to form a global purchasing alliance to help them negotiate better prices as competition in the French grocery market increases.

[GENEVA] Casino Guichard Perrachon SA and Auchan Retail are in exclusive talks to form a global purchasing alliance to help them negotiate better prices as competition in the French grocery market increases.

The partnership would cover major national and international consumer-goods makers, the companies said in a statement Tuesday. They expect it would help fuel the development of French suppliers abroad and said they would ensure the pact complies with competition rules.

The French supermarket sector is in tumult, with Carrefour SA having lost its domestic lead as the country's top grocer to Leclerc. Last month Amazon.com Inc. formed a delivery deal with Casino in Paris to sell items from its Monoprix stores via the Amazon Prime Now app.

Auchan and Casino said they would offer to have their current procurement partners take part in the alliance. Casino has ended its procurement tie-up with Intermarche.

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Market voices on:

"All the French retailers need more purchasing scale, so this is one way of achieving that," said Charles Allen, an analyst with Bloomberg Intelligence. He said the potential Auchan pact would cover a smaller share of the French market than did the Intermarche agreement, however.

Closely held Auchan had sales of 52 billion euros (S$83.6 billion) in 2017 and operates its single brand in 17 countries. Casino had 38 billion euros of revenue last year and runs chains including Geant big-box stores, Casino supermarkets and French e-commerce site Cdiscount.

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