The food giant Mars no longer supplies the retailers Edeka and Rewe. Well-known confectionery and pet food brands are missing from the shelves. What is behind the conflict?
There is no end in sight to the price war between Mars and the supermarket chains Edeka and Rewe. According to the “Lebensmittelzeitung”, the US manufacturer no longer supplies the stores. The result: gaps on the shelves. The US group owns around 300 well-known brands in Germany. These include candy and chewing gum such as M
The reason for the delivery stop: Mars wants to push through higher prices. The US group has been in dispute with Edeka and the discounter Netto, which belongs to the group, for around three months. Recently, Rewe came along with its discounter Penny. Delivery stops as part of price negotiations between manufacturers and retailers occur again and again. What is unusual, however, is the duration of the current conflict.
Retailers and food manufacturers are struggling with rising prices for energy and logistics, for example, but raw materials have also become more expensive as a result of the Russian invasion of Ukraine. The food giant Nestle increased its prices by an average of around 6.5 percent in the first half of the year. Mars confectionery boss Carsten Simon told the “Lebensmittel Zeitung” that his company “urgently needs a second price increase this year” due to cost increases.
According to Rewe, consumers have to adjust to higher prices because large suppliers in particular are continuing to screw up prices. “A large proportion are free riders … surfing the price wave and benefiting from it to improve their results,” said Rewe boss Lionel Souque. However, the retailer defends itself against the demands: “We are fighting brutally against it.” Competitor Edeka has also warned its suppliers against excessive price demands. “Food must not become a luxury good,” said Edeka boss Markus Mosa. For its part, Rewe had already announced that it would not want to pass on all increases to customers and thus accept the impact on profits.
“Many come and announce price increases of ten percent and say Rewe should pass this on to the customer,” reported Souque. “That’s totally unrealistic.” The widely branched Rewe Group with an annual turnover of almost 77 billion euros is on the road in many countries and has a purchasing partnership with the French chain Leclerc. “When you hear that a supplier says to us that he wants 30 percent more in Germany and wants five percent more for the same article in France, then I wonder where the logic is,” reported the Rewe boss. “Then there are big discussions.”
The majority of suppliers are behaving sensibly, said the Rewe boss. “But we have a problem with the really big manufacturers who have the power to enforce demands,” he added. Coca-Cola, for example, argues in analysts’ presentations that the group is cutting its costs through austerity programs – and then justifies Rewe’s demands for price increases with rising costs. “Then we have a problem,” he added.
