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Discounter Lidl is banning Danone products from its French shelves after a discussion about price transparency. The ban on eight references of the Danette and Activia brands enters into effect on 15 May.
Compensation
The cause of the row is not strictly price-related, Lidl France’s purchasing director Michel Biero tells Capital.fr: “We delist the products due to a lack in transparency“. Biero points to the recent Egalim law, which forces retailers to calculate their prices based on the farmers’ costs. “In order to pay the farmers the right price, we have to know how much milk the producer needs to make his yogurt – but Danone refuses to clearly share this information with us.”
The ban is not a real problem for Danone, as Lidl represents only a percent of its total volumes. “We take note of Lidl’s statement, but we are surprised to hear the reasons given for the termination of our business relationship”, the dairy producer says.
Remarkably, Lidl has decided to fill the gap created by the Danone delisting… by buying thirty million litres of milk from dairy farmers that usually work with Danone. Moreover, Lidl will sell these volumes under its own brand Envia, which it bought ten years ago… from Danone. “We do not need Danette”, the discounter says.
