Cooperation agreements in the food chain: win-win relationships for a more sustainable chain. The case of Mercadona

Abstract

The aim of this paper is to study the impact of cooperation between operators in
the food supply chain. And particularly between two of the operators (retailers and suppliers)
whose relationship, given the asymmetry between them, has often been questioned and labelled
as unequal, favouring the stronger party. Specifically, we will analyze the most demanding
type of agreement for suppliers, as it involves exclusive supply. This paper aims to study
whether the collaborative relationships between these two food chain operators benefit both
parties equally and, therefore, contribute to the economic sustainability of the chain. To this
end, we analyze whether it is worthwhile for a supplier in the retail grocery sector to develop
a long-term exclusivity collaboration agreement with a retailer to whom they sell their entire
production or most of it (exclusive key retailer account). For this purpose, we have analyzed
Mercadona’s suppliers, the largest food distribution company in Spain, at a time when their
relationship was based on exclusivity. Through inferential statistics and a logistic panel regression,
a comparison of Mercadona’s exclusive suppliers with two control groups (subsector and
non-Mercadona intersuppliers obtained by matching) has been carried out.
The results suggest that this type of exclusive collaboration agreement, in the case of Mercadona
with its exclusive suppliers, is beneficial and profitable for the weaker party, the supplier.
Our findings provide evidence that collaboration and cooperation between suppliers and retailers
can provide a win-win relationship, the key to which is maintaining effective cooperation
between both parties in order to accomplish common goals.