Jan Boone, CEO of Biscoff producer Lotus Bakeries, is very clear about his position on the recent frictions between supermarkets and food producers: “If a customer does not accept our higher prices, we do not produce for him”.
Constructive negotiations
Lotus Bakeries was able to announce another set of excellent annual results, but this year proves to be more challenging as costs for raw material, transports and wages are on the rise. The Belgian biscuit producer has made its position regarding price hikes clear in no uncertain terms: higher production costs equal higher prices for supermarkets, CEO Jan Boone told Belgian business newspaper De Tijd.
“We have already reached an agreement with a number of customers, but we are still negotiating with others. Some talks are a bit more difficult than others, but all of them are – so far – constructive: no product of ours has already been delisted”, the CEO says. He wants retailers to accept that his company needs the price hikes to keep its margins high and to keep investing. “If a customer does not accept our higher prices, we do not produce for him”.
Boone pulls no punches, which is remarkable given his position as CEO at a major FMCG producer. While it is clear that Lotus Bakeries has a stronger bargaining position than most, given is leading position in the snack industry, retailers have already shown that they do not hesitate to delist even the strongest brands in order to build up pressure. The number of high-profile conflicts is on the rise, with the most striking example being that between Dutch retailer Albert Heijn and Swiss Nestlé. They even took their fight to the press – a highly unusual move, as annual purchasing negotiations are usually kept far away from the spotlights.
