Kaufland v Unilever row escalates

An ongoing dispute about prices has come to an end as German hypermarket chain Kaufland decided to terminate all dealings with British-Dutch manufacturer Unilever. Brands like Knorr, Lipton, Axe, Dove and Magnum will no longer be available in their stores.

 

Price hike row

The conflict has been going on since September: the retailer removed hundreds of Unilever products after a dispute on raised prices. "The new conditions do not allow us to offer our customers the best possible prices," they said. Attempts to smooth things over failed, leading to the chain's decision to pull the plug entirely.

 

Kaufland is part of the Schwarz group, just like better-knownLidl, raises 300 million euros worth of turnover from Unilever in its 1200 outlets in Germany and Eastern Europe. Still, German media claim that the brand manufacturer was getting less interested in the chain because of weak sales figures and the high pressure on the prices. Ironically, the collaboration ends on 31 December, precisely one day before the arrival of new CEO Alan Jope at Unilever.

 

Conflicts between retailers and brand manufacturers are becoming more frequent lately. The supermarket sector is fiercely competitive and chains therefore put pressure on their suppliers to enforce better purchasing conditions. Other feuds are going on right now as well, like that between purchasing group Agecore (Colruyt and German market leader Edeka) and brand manufacturers Mars and Red Bull. Several products will disappear from the stores as a result.