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December 21, 2018updated 07 Apr 2021 6:04pm

Kaufland’s Unilever spat escalates

German supermarket chain Kaufland said it plans to cease stocking several Unilever products from next year. 

German supermarket chain Kaufland plans to cease stocking several Unilever products from next year as a long-running pricing spat with the consumer goods giant escalates.

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The case between the retailer and Anglo-Dutch firm dates back to at least May, and in September culminated in Kaufland removing 480 products from its shelves after failing to reach an agreement over what it deemed to be unacceptable price increases. While the supermarket ditched Unilever brands in Germany at the time, it also took the step of halting orders for its stores in the Czech Republic, Slovakia, Croatia, Poland, Romania and Bulgaria.

But the dispute has now spilled over to encroach into the terms and conditions between the two parties, with Kaufland arguing Unilever is seeking to benefit from the price increases to its own advantage, and at the expense of the retailer.

“As of 31 December, Kaufland has completed decades of business relations with Unilever in Germany,” the supermarket chain said in a statement. “[The] reasons for this are drastic price increases as well as unilateral changes to the terms and conditions of Unilever. As one of the world’s leading branded goods manufacturers, Unilever seeks, from Kaufland’s point of view, to use its outstanding market position to influence the retailer and further optimise its own revenues.”

Unilever, meanwhile, declined to comment. A spokesperson for the company would only say that “we consider the relation with our trade partners confidential”.

Kaufland in Germany will remove the Unilever brands Knorr, Ben & Jerry’s, Magnum, Mondamin, Pfanni, Bertolli, Unox, Lipton, Langnese, Coral, Viss, Domestos, Dove, Rexona, Duschdas, Signal and Ax from its shelves by the end of the month. 

However, the retailer said selected ice cream products from Magnum, Cremissimo and Viennetta “are still available”.

As was the case in September, Kaufland said its branches in the Czech Republic, Slovakia, Croatia, Poland, Romania and Bulgaria “no longer have several Unilever brands on offer”.

Still, Kaufland, which is part of the Schwarz retail group that owns the discount retail chain Lidl, reiterated comments made earlier in the year it has other suppliers and alternative products on offer that can fill the gap left by Unilever.

“Since the dispute with Unilever has been going on since May, Kaufland was able to adjust to the situation,” the supermarket stated. “Due to the large selection of up to 60,000 articles, many brands and own brands are available to customers as alternatives. An analysis of the market data has also revealed that Unilever products are highly interchangeable and that customers have already adjusted to it.”

Meanwhile, Kaufland said the “drastic” price increases sought by Unilever would have damaged the retailer and pushed up prices beyond what it said were market rates.

Ultimately, Kaufland said it had failed to reach a compromise with Unilever, despite concerted attempts to resolve the dispute.

“Kaufland regrets this decision and that despite all efforts no agreement could be reached with Unilever. The dealer is interested in a fair cooperation with Unilever and has shown many solutions in the past few months. These were rejected by Unilever.”

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Free Report
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Unilever- A Deep-dive into Product Launches and Advertising Strategy

Unilever product advertising is mainly through mainstream TV channels. Out of the products advertised so far at least 50% (over 850) of ads have been run on TV, while print media comes second with 496 ads. Unilever also utilizes social media platforms for advertisement. Unilever products are categorized by innovation ratings and tags in our product launch database. The North American region consists of almost 74 products with innovations related to the formulation of the product. Europe and other regions also have more products categorized under formulation-related innovation, followed by the packaging and positioning of the products. Most Unilever products are tagged with “High Vitamins”, “Recyclable”, and “Natural” tags to understand what the product differentiator is from other products available in the market. The majority of products belong to the personal care industry with a total of 5,788 products to date. This report, through the Unilever Example, illustrates how GlobalData Explorer enables you to:  
  • Track product launches by FMCG companies to get an understanding of the product-level strategies including geographic concentrations, innovation types, product claim, category focus and more
  • Monitoring the advertising strategies of various brands and gain insights into channel focus, regional focus, and more
  • Perform company-level analysis to understand business model, size, and geographic focus
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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