Eurorad: ZEG’s New Purchasing Cooperative

COLOGNE, Germany (June 11) - Eurorad Deutschland GmbH is ZEG's new wholly owned daughter which was founded in Cologne end of May. In a May 28 letter it is explained why Germany's biggest buying association started the new company. In this letter ZEG MD Georg Honkomp states that the rapidly changing market with his changed competition is also alarming the ZEG. "In order to maintain the current purchasing volumes and the present position in the market, the ZEG must now decide on the future competition abilities." However, what also must have contributed to the decision to set up the new company was the fact that the entry of ex-BICO members into the ZEG presented problems. This has to do with the fact that these ex-BICO dealers are often located in cities or regions where existing ZEG members are operating. The rights of the current ZEG members for exclusivity within their area prevented the entry of ex-BICO members in the same area. With Eurorad GmbH operating as a separate entity from ZEG, it should offer the solution for this problem. However, despite the fact that Georg Honkomp stipulates in his May 28 letter that the founding of Eurorad will not weaken ZEG-members but will strengthen the specialized bike trade in Germany; this move was obviously not welcomed by the existing ZEG members. This is illustrated by the fact that Axel Böse recently left ZEG. He was in charge of member-relations at Germany's biggest IBD cooperative. About 300 dealers showed an interest in participating in Eurorad Deutschland GmbH, says Eurorad in the May 28 letter. How many of these dealers are ex-BICO is unknown. After the emergency meeting BICO held May 11 lots of BICO members didn't make it a secret that they did not approve with the restructuring process of the Verl based dealer cooperative, and were contemplating an ending of their membership, with ZEG as a possible alternative. Since the May 11 meeting 28 members left BICO. The new ZEG-owned buying association will operate completely independent from Germany's biggest dealer cooperative. Einkaufs-Kooperation Eurorad Deutschland GmbH will have its own range of products; its own contract suppliers (which are also dealing with ZEG) that will produce special bike models and private label bikes for Eurorad. Other services like a centralized order payment service and the warehouse in Cologne will be shared with ZEG. MD of Eurorad Deutschland GmbH is Georg Honkomp who also heads ZEG. (JO)