Colruyt ends dispute with Nestlé and Ferrero

Belgian retailer Colruyt has reached a price agreement with Nestlé, after a price dispute had led the Swiss multinational to suspend its deliveries. Those deliveries will now be resumed. Likewise, a dispute with Ferrero has also been resolved.

Empty shelves

Coffee capsules of Nescafé Dolce Gusto and Lion-candybars were no longer available at Colruyt stores, Belgian business newspaper De Tijd previously reported. Nestlé wanted to raise prices to compensate for increasing prices for raw materials, transportation and energy. However, market leader Colruyt – whose USP is a lowest price guarantee – resisted and things escalated.

But now newspaper Het Nieuwsblad reports that the dispute has been resolved, and that the first trucks have already started shipping goods to Colruyt’s distribution centres. This was subsequently confirmed to RetailDetail by the retailer: “We are currently holding our annual price negotiations with Nestlé. These are happening in a constructive manner, and the products from Nestlé will be available again in our store as of this week. We do not provide additional information on the details of the talks in the interest of the negotiations and our relationship with the supplier.”

Open conflict

Two weeks ago, a similar dispute between Nestlé and Albert Heijn escalated to an open conflict, that took place in the media. According to the Dutch supermarket, the Swiss food giant wanted to raise their prices by 20 %. The multinational denied those claims and said the price hikes would be limited to 10 %. This dispute has not yet been resolved and Nestlé’s products remain unavailable at Albert Heijn.

Colruyt also closed the negotiations with Nutella-producer Ferrero. These talks got a bit heated in November, causing the smaller Nutella jars to go out of stock in Colruyt stores. This will remain the case even after an agreement was reached. “We have reviewed our product range”, says Colruyt, who denies that this is some sort of retaliatory move.

Opportunism

Supermarkets fear that some manufacturers are abusing the high inflation to push through additional price hikes. Top managers at, amongst others, Jumbo and Colruyt, have indicated that some companies are looking for price hikes that exceed the rise in raw material costs. In its conflict with Nestlé, Albert Heijn claimed that the Swiss had offered insufficient proof to justify the price hikes.

All of this does not mean that consumers will see higher prices in stores: Belgian consumer organisation Test-Aankoop says the average price increases in supermarkets in January were 2.19 %. Fresh goods like fruit, vegetables and meat registered a 5 % increase. The level of price hikes in the stores varies a lot between large supermarket chains, according to price comparison app Pingprice. Colruyt, for example, has a tendency to wait a bit longer to increase its prices to maintain its guaranteed lowest price.