Unilever, Delhaize End Month Long Fight Over Product Supply
March 06 2009 - 11:44AM
Dow Jones News
Unilever NV (UNA.AE) and Delhaize Group (DELB.BT) Friday ended a
month-long disagreement over the supply and price of a range of
Unilever products in Belgium.
The "balanced agreement" is a positive outcome for both parties,
the companies said in a short statement.
Delhaize Belgium in early February removed some 250 products
from its stores following a disagreement with Unilever over the
selection of products Delhaize wanted to carry, and their
price.
Delhaize accused Unilever of trying to push a broad range of
goods into its stores, many which the grocer did not want to stock
because it found them to be unpopular. However if it refused to
carry these items Unilever had threatened to raise prices by an
average of 30% for the remaining items, Delhaize said.
What brought the unusual public quarrel to an end is still
unclear as both companies declined to disclose further details of
the agreement, but analysts broadly agreed that the end of the
fighting was positive for both companies.
"The fact they've kissed and made up is certainly good news for
Unilever," said Shore Capital analyst Clive Black. While not a huge
issue for either company, it was one of the more "significant
spats" he can recall between a retailer and a producer.
KBC's Pascale Weber said that the fight had highlighted the
difficult position suppliers are in the economic downturn, where
supermarkets' own brands often gain in popularity due to price
comparisons. However some people are really "brand concious" and
overall it is good for both companies that there was an agreement,
she added.
Delhaize which does over two thirds of its business in the U.S.
had been the only large retailer in Belgium that hadn't agreed to
an overall price rise this year.
-By Peppi Kiviniemi, Dow Jones Newswires; +32 (0)2 741 1483;
peppi.kiviniemi@dowjones.com
(Michael Carolan in London contributed to this article)