Migros has just joined Coop in its showdown with the American group Mars, which owns several food brands. The original Bens rice, the Twix or Balisto will disappear from the shelves of the Coop. On the Migros side, cat food is no longer available.
Since the beginning of the month, consumers have seen a dozen of their favorite products gradually disappear from the shelves of the Coop and Migros. Exit different varieties of Benz Original rice, certain Balisto bars and several foods for dogs and cats.
All these items are produced by the American multinational Mars, well known for the bar of the same name, but which also has regarding twenty products in food, including chocolate branches sold in all kiosks. Less known to the general public, the group is also one of the world leaders in animal feed. In Switzerland alone, this market is worth nearly 500 million francs.
Mars is therefore an important player in the food market in Switzerland. But it does not impose its law once morest Coop and Migros, which form a distribution duopoly in Switzerland, with 77% of the market share.
“Exaggerated” price increase
The origin of arm wrestling? An exaggerated price increase, according to Coop, which accuses Mars of having “imposed above-average and disproportionate requirements”.
Neither Coop nor Migros wished to communicate the amount of these price increases: “As usual, the negotiations are being conducted behind closed doors. We therefore do not communicate other details”, writes Migros.
This is not the first time that these two giants have clashed over prices, going so far as to threaten to withdraw the products from the shelves. When the negotiations get stuck, the brands’ customers are quickly taken hostage to the standoff: “It’s a great classic. It’s part of the weapons of mass distribution to threaten manufacturers with no longer distributing their products if they do not accept their conditions,” said Nicolas Inglard, director of the marketing consulting firm Imadeo.
Lack of transparency
This balance of power is a peculiarity of Switzerland, whose duopoly gives considerable weight to distributors in relations with manufacturers. Especially since both Coop and Migros manufacture their own products. Clearly, if they no longer buy risotto from Mars, they can replace it on the shelves with their own risotto.
For now, the products are withdrawn from sale, but behind the scenes negotiations continue. Who from the manufacturer or the distributors will back down? The answer should come in the next few weeks. But with the return of inflation, we can expect ever more complicated price negotiations.
For his part, the consumer must deal with a lack of price transparency, both on the part of the manufacturer and the distributor.
>> See Viviane Gabriel’s explanations:
Jean-Paul Cateau/fme
