FRANKFURT (Reuters) - Germany’s largest supermarket group Edeka has written to its stores recommending that they drop more of Nestle’s (NESN.S) products in an escalation of a pricing row between the world’s biggest packaged food maker and European retailers, a trade journal reported.
Nestle is facing off with AgeCore, a Geneva-based group representing six European retailers, including Edeka, which is seeking better supply terms.
Germany’s Lebensmittel Zeitung late on Thursday cited a letter Edeka had sent to its 5,900 supermarkets suggesting that they stop ordering further Nestle products including the KitKat brand of chocolate bars, Vittel drinks and Wagner frozen pizza.
The boycott had so far affected 163 Nestle products, equal to around 20 percent of revenue the chain generates with Nestle products, the magazine said. That figure will rise to 30 percent with the expanded measures, the magazine said, without saying how many products they would affect.
Edeka declined to comment on the letter on Friday. A spokesman for Nestle referred to comments the company’s Chief Executive Mark Schneider made to a newspaper last week, while declining to provide further information.
Schneider had told Neue Zuercher Zeitung in an interview that Nestle was still negotiating with Agecore to end the spat and hoped to find a sensible solution.
“This aggressive approach coordinated across Europe (of withdrawing products from supermarket shelves to enforce price reductions) is new, particularly in Switzerland,” Schneider said.
Reporting by Riham Alkousaa; Additional reporting by Michael Shields in Zurich and Tom Kaeckenhoff in Duesseldorf. Editing by Jane Merriman