Leclerc has lost its appeal against a court decision ordering its purchasing arm, Galec, to reimburse “discounts” of EUR23.3m (US$38.5m) which it received from a group of some 28 suppliers.
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The Versailles Court of Appeal confirmed point by point the earlier judgement that Galec had breached French commercial law in receiving the discounts, paid retroactively, for commercial services which it had not provided. It also validated a civil fine of EUR500,000 payable to the state.
The French supermarket chain said it “acknowledged” the appeal court’s decision but explained that the payments were made“within the framework of agreements with Galec in order to bring to an end a commercial dispute between the parties.”
It went on to highlight that “none of the suppliers had backed the court case – brought by France’s competition watchdog, the DGCCRF – against Galec or had called into question the validity of these agreements.”
At the time of the initial court hearing in 2005, Leclerc president, Michel-Edouard Leclerc had claimed that the 28 suppliers had offered better commercial terms to the company’s rival, Carrefour. He said that once this had come to light the suppliers had agreed to compensate Leclerc.
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By GlobalData
