Coffee price war sees certain Colruyt supplies dwindle
Friday, 24 January 2020
Colruyt is one of the leading supermarket chains in Belgium, and DE cannot afford not to be present on its shelves. Credit: pixabay
No-frills supermarket chain Colruyt and Dutch coffee company Douwe Egberts (DE) are engaged in a trade war over the price Douwe Egberts is demanding for its coffee.
The dispute concerns not only the original DE brand, but also its properties Senseo, Jacqmotte and Pickwick tea. In brief, Colruyt wants DE to lower its prices; DE is resisting. The two are at a stalemate, and the shelves in Colruyt stores and its low-price subsidiary Okay are empty as a result.
In a written communication to the VRT, Colruyt made light of the problem. “Every year Colruyt carries out negotiations with various suppliers,” the company said. “In the majority of cases an agreement is reached quickly. But there are also moments when both parties take somewhat longer to reach a consensus, as has happened in this case.”
For the present, the broadcaster concludes, there is no telling how long the dispute may keep DE’s coffee and tea off of the supermarket’s shelves. In the past, similar price discussions with Nestlé and PepsiCo have taken weeks to be resolved.
“This is the ultimate exercise of pressure for a supermarket chain,” commented retail expert Stefan Van Rompaey on VRT Radio 1. “Colruyt wants to buy products in as cheaply as possible, while Douwe Egberts wants to get the best price it can.”
To add to the pressure, Colruyt operates a lowest-price guarantee, by which it offers customers a refund if they can find the same product elsewhere for less. But the chain is also under pressure to offer its customers the leading brands, Van Rompaey said. “Coffee is a very important product,” he said. “We drink it every day, and people buy it every week and know how much it costs.”
On the other hand, Colruyt is one of the leading supermarket chains in Belgium, and DE cannot afford not to be present on its shelves, he said. And the publicity the dispute is now gaining will put more of an emphasis on that absence, while helping to profile Colruyt as being tough on prices.