Price negotiations are escalating in several European countries. In France, Jacobs Douwe Egberts has stopped deliveries to Intermarché, in the UK the Colgate Palmolive range has disappeared from the shelves at Tesco.
New wave of conflicts
It is once again hot air between quite a few supermarket chains and large brand manufacturers. At Belgian market leader Colruyt, the folds with Ferrero and Nestlé seem to be smoothed out, but new conflicts are surfacing.
The Dutch web supermarket Picnic recently removed Lay’s crisps from its assortment after a disagreement about price increases. “We fight for the lowest price. Unfortunately, we cannot reach an agreement with this supplier”, reports the retailer in its app. Picnic buys together with German market leader Edeka, which is currently cracking down on big suppliers like PepsiCo, L’Oréal and Melitta.
Public disputes
In France, an open conflict rages between supermarket chain Intermarché and coffee producer Jacobs Douwe Egberts: the latter stopped deliveries after the retailer refused to accept price increases. To the business magazine Capital, the manufacturer states that it “prioritises dialogue with Intermarché and will do everything possible to reach a reasonable agreement as soon as possible“. According to Intermarché, JDE would want to force through a 25% increase in its tariffs. A judge has meanwhile forced the coffee roaster to resume deliveries.
Things are also rumbling in the United Kingdom. At market leader Tesco, according to the trade magazine The Grocer, almost the entire range – more than 70 references – of Colgate Palmolive has now disappeared from the shelves and the webshop. On social media, the retailer is evasive in its response to questions from dissatisfied customers. A Tesco spokesperson responded to The Grocer that the retailer hoped “to have a full range of Colgate products available for customers again soon” but “in the meantime, we continue to have strong availability across all the other oral care products in our range”.
Position of strength?
What is striking in the ongoing disputes is that it is often not the case that retailers are taking references off the shelves, but rather that it is the manufacturers themselves who are stopping deliveries – or threatening to do so, as Lotus Bakeries‘ top executive Jan Boone recently did. Do manufacturers negotiate from a position of strength? In this analysis, we explore the question in more detail.
