Edeka reaches agreement with Nestle in retail dispute

BERLIN, May 2 (Xinhua) — Germany’s largest supermarket chain Edeka has reached an agreement with Swiss foodstuffs producer Nestle in a long-standing retail dispute, German media reported on Wednesday.

Spokespeople for Edeka and Nestle both confirmed the development without providing any detailed information on the content of the agreement. Edeka had been leading a widely-publicized charge of the European retail alliance Agecore in an attempt to force Nestle to offer better prices and trading conditions.

“We welcome the circumstance that a balanced agreement has been reached with Agecore”, the Nestle representative told press on Wednesday. The world’s largest foodstuff producer emphasized that it remained its “priority to ensure that we can offer our customers the products which they know and enjoy.”

Earlier, Agecore, threatened to remove up to 200 Nestle products from its aisles unless Nestle offered better purchasing terms. The retail group counts Hamburg-based Edeka, the French Intermarche chain and Coop stores in Switzerland among its members and accounts for roughly 2.8 percent of Nestle’s total annual revenue of 90 billion euros (108 billion U.S. dollars).

Although disputes over pricing conditions are not uncommon in the retail industry, the conflict between Edeka and Nestle was unusual in its rapid escalation and the public nature of related threats and accusations exchanged between the two forms. Above all, Edeka lamented that Nestle was purportedly offering its German supermarket rivals Aldi and Lidl preferential treatment.

Whereas Nestle was able to weather the boycott of its products without suffering much financial damage, the Vevey-based company expressed concern that offering too many concessions to Agecore could set a precedent for other retail customers to demand cost savings as well. Companies in the German retail industry have been following the case closely.

According to the foodstuffs publication “Lebensmittel Zeitung”, buyers at Edeka, which is organized as a cooperative” have now received a new directive to begin reordering Nestle products on Wednesday. “We are entering regular operations again”, an internal message to staff read.

Edeka recorded record annual revenue of 51.9 billion euros (62 billion U.S. dollars) in 2017. The retailer is largely organized as a cooperative society with around half of that figure being contributed by 3,800 independent retail entrepreneurs.

Leave a Reply

Your email address will not be published. Required fields are marked *