Pricing disputes prompt Iglo to part ways with German retailer
Unable to come to a consensus regarding pricing, Iglo Group’s German subsidiary has decided to part ways with retail chain Kaufland, terminating the supply agreement it had with the grocer.
Financial publication Wirtschaftswoche received confirmation from a Kaufland spokesperson regarding the split – Iglo has already discontinued supplying the retailer with its fish, vegetable and ready-meal ranges.
Nomad Food-owned Iglo isn’t the only entity to sever agreements with Kaufland either, with food company Mars also putting an end to its supply contract after weeks of negotiations yielded no pricing compromise. According to Wirtschaftswoche, trade negotiations between retailers and brand producers have been “tougher” as of late, especially since major grocer Aldi embraced cheaper deals and thus forced competitors such as Edeka, Rewe and Kaufland to reduce their selling prices.
Kaufland operates 650 storefronts throughout Germany, and is part of the Schwarz Group, which also owns prominent discount retailer Lidl. The grocer is present in seven foreign markets and generates approximately EUR 20 billion (USD 22.7 billion) in annual sales.