Unilever Talks With Delhaize After Grocer Scraps 320 Products

Unilever, the world’s second-biggest consumer-goods company, is trying to persuade Delhaize Group to put products from Dove soap to Sunsilk shampoo back on its shelves after the supermarket owner balked at paying full price.
Delhaize said yesterday that it stopped buying 250 Unilever products to stock its 775 supermarkets in Belgium, which dominate the local market. The removals don’t apply to the Brussels-based company’s U.S. chains, which include Food Lion.

Unilever spokeswoman Aurelie Gerth said Delhaize, which had already removed 70 other Unilever goods before October, refused to buy all the brands the company offered and wouldn’t guarantee new products would get shelf space. Though talks continue, there’ll “probably not be a solution this week,” she said.
“We didn’t agree to their terms, so they refused to grant us discounts,” said Delhaize spokeswoman Liesbeth Rogiers. “That would really boost our purchasing prices and we can’t and won’t pass those on to our customers.”
Unilever and rivals from Nestle SA to Procter & Gamble Co. have relied on price increases to recoup soaring costs for raw materials in recent years. That strategy has hit a snag as economies around the world sink into recession and shoppers abandon branded goods for cheaper private labels.

For this year, Unilever has increased prices by 2.5 percent for retailers in Belgium, according to Gerth. Belgian rival Colruyt SA and Paris-based Carrefour both struck deals after accepting Unilever’s terms, Gerth said.
Delhaize plans to sell the remaining Unilever products it has in stock, and has put up signs in its stores directing shoppers to alternative brands and private labels, Rogiers said.
“Unilever offers a very broad product range that would take away our freedom to choose our own products,” said Rogiers. “We’d like to keep control over our own product range to meet our customers’ demands.” She said Delhaize is “still open to a solution.”

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