JDE Peet’s products are returning at Dutch retailers Jumbo and Picnic, albeit at significantly higher prices. The retailers say they cannot fully pass them on to consumers, and that the brand’s power in negotiations is “enormous”.
Up to 30 % more expensive
Products of Douwe Egberts and other JDE Peet’s brands will soon return to Jumbo’s stores and webshop, after the retailer reached an agreement with JDE Peet’s on the purchasing conditions – as has online supermarket Picnic. Both retailers stopped selling Douwe Egberts because of the “unacceptable” price increases the producer wanted to implement.
Although the conflict dragged on for almost two months, the negotiations do not seem to have yielded the intended result for the retailers. The recommended prices for coffee pads are set to increase by 20 %, and those for beans even by 30 %, Dutch newspaper De Telegraaf reports. These substantial price increases are too substantial for the retailers to pass them on fully to the consumers, so they will have to give up a part of their margin instead.
“Power of A-brands is enormous”
Coffee prices have risen sharply on the world market, partly due to supply problems after bad weather conditions, but Picnic CEO Michiel Muller accuses the producer of increasing prices more than is necessary. He calls the power of A-brands “enormous”. “Their consumers want to be able to buy their products, which means that the negotiations are dominated by the A-brands. We will have to pay for part of the higher purchase prices ourselves in order to keep it somewhat affordable for our customers. We still have to determine exactly how much. So we are giving up margin, while the manufacturer is increasing its profitability.”
Two weeks ago, JDE Peet’s had already reached an agreement with the Belgian Colruyt Group after a conflict of more than two months. However, its products are still not available at Delhaize and Albert Heijn. There is also no news yet from other members of the Everest purchasing alliance, of whom Jumbo and Picnic are members.
