German market leader Edeka is delisting almost the entire range of multinational PepsiCo. The annual negotiations between supermarkets and brand manufacturers lead to growing nervousness all over Europe.
Supermarket chain Edeka takes bold measures: the retailer removes almost the entire PepsiCo assortment from its shelves. The soft drink and snack producer does not want to give in to the demands of the new European purchasing alliance Epic Partners, which was founded by the German market leader last summer, trade journal Lebensmittel Zeitung reports. The conflict is not unique: Edeka is currently also in a dispute with cosmetics group L’Oréal, whereby some 150 products were taken off the shelves.
The ongoing annual discussions lead to conflicts between large manufacturers and food retailers in several European countries, including Belgium: some Nutella and Mondelez products are temporarily no longer available at Colruyt. Main cause: the large price increases announced by the manufacturers now that the costs of raw materials, transport and energy are skyrocketing. Supermarket chains do not accept that their suppliers want to pass on these costs in full to their customers, and ultimately to the consumer.
“In the consumer’s interest”
Colruyt Group’s operations director Marc Hofman left no doubt about this earlier this week in a reaction to RetailDetail. “We see large and inexplicable differences between producers of similar products“, he noted. “We are also discussing what will happen when this exceptional concurrence of cost increases comes to an end; what will happen to the prices when the energy costs and the raw materials decrease again? In the consumer’s interest, we also want to make clear agreements on this. Because of this, the negotiations are tougher this year than in previous years and they also take more time.”
Edeka’s démarche in confronting one of the largest FMCG suppliers is unprecedented: usually retailers limit themselves to delisting just a few references. But then, the Epic Partners alliance has a solid European footprint, with members such as Picnic, Biedronka, Jerónimo Martins, Migros, ICA and Magnit. At the head of the purchasing alliance is Gianluigi Ferrari, the former boss of Agecore, the retail alliance of which Colruyt Group is also a member and which is now headed by former Colruyt executive Dirk Depoorter.