The US group has to supply the dealer again at the previous purchase prices, at least for the time being.
(Photo: imago images/AAP)
Dusseldorf The manufacturer Coca-Cola has to supply Edeka with soft drinks again. The Hamburg Regional Court has decided that the US group must again supply the supermarket chain at the maximum purchase prices contractually agreed in January 2022.
Edeka has thus achieved its first success in the dispute with Coca-Cola over purchasing conditions. Because Edeka was not prepared to accept the increased purchase prices demanded by the manufacturer, Coca-Cola had stopped delivering to the German retail leader. As a result, there were gaps on the shelves in many shops.
A spokesman for Edeka welcomed the decision of the Hamburg Regional Court (AZ 415 HKO 72/22). He described Coca-Cola’s behavior as a “unilateral breach of contract”. He emphasized: “Dominating companies like Coca-Cola are prohibited from doing so under antitrust law.”
But the controversy shouldn’t end there. Coca-Cola will probably exhaust all possibilities to push through its price demands, at least in part. The group did not want to comment on the Hamburg judgment when asked and described it as an “ongoing process” to which Coca-Cola did not comment.
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In addition, the judgment only obliges Coca-Cola to deliver on the agreed terms until the end of September. However, the Edeka spokesman emphasized that the court decision was “a positive signal” for consumers in Germany.
Milka and Mars also argue about the price
The dispute between Edeka and Coca-Cola is not an isolated case. Almost all food manufacturers are currently trying to pass on their sharply increased costs to consumers via prices. Retailers, on the other hand, fear price increases because they are concerned that they will annoy customers even more and lose sales.
In numerous cases, conflicts have already escalated. The focus is often on Edeka. For example, the dealer and his daughter Netto denounced the alleged price gouging of the Mars group in social media posts. They called Mars’ demands for the candy “M&Ms” “moon prices” and promoted their own brand as an alternative that is 64 percent cheaper.
>> Read here: Price war with Coca-Cola – Edeka does not accept increase
Edeka is also in an open dispute with the manufacturer Mondelez about the delivery conditions. Mondelez no longer supplies Edeka with bars of the popular Milka chocolate. Since the beginning of the year, prices in supermarkets have increased by double digits. According to calculations by the Federal Statistical Office, food prices rose by 16.6 percent in August.
The trade accepts that the manufacturers also have cost increases that justify price increases. However, he considers many of the demands to be excessive, especially from the large corporations, which at the same time report double-digit profit margins. Rewe boss Lionel Souque recently said: “We don’t wave through every price increase, but check whether it is understandable.”
Contracts are getting shorter and shorter
However, manufacturers and dealers have probably not yet seen the peak of the cost pressure. Johannes Sausen, Director of Consumer Goods and Trade at IKB Deutsche Industriebank, explains: “The end of the road has not yet been reached when it comes to price increases for food.” Because the producer and wholesale prices have so far risen significantly more than the shelf prices in the supermarket.
One problem for the dealers is that the contracts on purchasing conditions are becoming shorter and shorter, so they are no longer reliable. The purchasing talks used to take place once a year, but today the contracts often only last a few months. Demands for higher prices often come before the end of the contract.
Edeka now sees the judgment of the Hamburg Regional Court as a turning point. “It sets limits to the price gouging of some brand groups who want to maximize their profits with unjustified demands for price increases,” says the Edeka spokesman. It is important to the retailer to relieve private households, especially in times of high inflation. “That’s why we’ve been in tough negotiations with the branded goods industry for months.”
Edeka argues that unavoidable price increases should not only be imposed on consumers, but should be distributed along the entire value chain. In many cases, retailers forego their own margin in order to slow down the upward trend in prices. “We expect our industrial partners to also live up to their responsibilities.”
More: Trade against manufacturers: Price wars call for the first bankruptcy