Cartels, a major concern for large companies

by time news

2024-01-15 21:00:12

A study carried out among purchasing directors shows that cartels are particularly feared.

Are cartels making a comeback? This is the feeling of purchasing managers of large companies. Some 56% of them think they are facing situations of illicit agreements, or cartels, between their suppliers in the same purchasing family. This is one of the major lessons of the study carried out by the consulting company AgileBuyer and the National Purchasing Council (CNA), which brings together corporate purchasing managers.

An illicit cartel is legally defined as the association of several companies through a decision, an agreement or any other concerted practice intended to distort the free play of competition on a market. “The cartels lead to a sharp increase in purchase prices as well as unfair competition in the management of the supplier panel”explains Olivier Wajnsztok, associate director at AgileBuyer.

In recent years, the courts have repeatedly condemned cartels. In September 2023, six companies were sanctioned by the Competition Authority for illegal agreements in the nuclear field. They were ordered to pay a total fine of more than 31 million euros. Several agri-food sectors have also been sanctioned for having agreed on price increases.

“Made in France” is weakening

In December 2019, the Competition Authority imposed a fine of 58.3 million on six companies producing compotes. In July 2020, twelve charcuterie manufacturers were penalized with a fine of 93 million for having agreed on the price of ham between 2010 and 2013. Some agreements are therefore caught by the courts. “The complexity of a cartel situation is that it is difficult to establish, and therefore difficult to counter, underlines Olivier Wajnsztok. It’s a silent poison.”

The interest shown by purchasing directors in cartels shows, however, that the general situation has stabilized a little after several years of crises (Covid, war in Ukraine, inflation, etc.) which affected supply chains. As proof, cost reduction will once again become a priority in 2024 for 77% of the purchasing departments surveyed, as it was a few years ago. However, lessons inherited from the crises remain relevant, particularly linked to geopolitical risks.

“51% of companies want to reduce their dependence on ChinaOlivier Wajnsztok further specifies. Which does not mean that they intend to get out of it completely.” Likewise, 45% of purchasing departments plan to relocate in 2024, an increase of eight points compared to 2023.

This intention does not go so far as to further strengthen the desire to opt for “made in France”. Interest in suppliers manufacturing in France thus falls from 65% in 2023 to only 47% this year. “Interest in “made in France” is weakening compared to previous years, because it had been boosted by supply difficulties.t, note Olivier Wajnsztok. However, they are much less strong today.”

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