April 17, 2018 / 5:58 AM / 10 days ago

Nestle, retailers make progress in talks to end price row

ZURICH (Reuters) - Nestle (NESN.S) and European supermarket retailers are making progress toward settling a months-long price dispute but the Swiss food giant still needs to offer more concessions, German chain Edeka said on Tuesday.

FILE PHOTO: The Nestle logo is seen during the opening of the 151st Annual General Meeting of Nestle in Lausanne, Switzerland April 12, 2018. REUTERS/Pierre Albouy/File Photo

Nestle has for several months been facing off with AgeCore, a Geneva-based group representing six European retailers - including Edeka and Switzerland’s Coop - who have boycotted Nestle products as they seek better supply terms.

“We’re making progress and we want to end this fight,” Edeka’s Chief Executive Markus Mosa said on Tuesday at his company’s 2017 results presentation in Hamburg.

Nestle had made an offer but “it is not acceptable as it stands,” Mosa said. Several unspecified issues must be resolved to satisfy AgeCore’s demands, he said.

Edeka, Germany’s largest supermarket group, this month recommended its stores expand an existing boycott of some Nestle products, escalating the pricing row between the world’s biggest packaged food maker and European retailers that began in September.

Switzerland’s Coop also broadened its boycott earlier this month, banishing more Nestle products from its shelves.

Mosa said his side still has room to raise pressure on Nestle if it sees fit, but that was not currently planned.

    Earlier, the Frankfurter Allgemeine Zeitung reported that a tentative compromise had been reached and that officials from both sides were hammering out the details of a new contract, citing an anonymous source that the German newspaper said was involved in talks between Nestle and AgeCore.

    “Nestle managers were willing to make concessions on key points,” the source told FAZ.

    The newspaper also reported that Edeka-led AgeCore was demanding, among other things, that KitKat maker Nestle contribute more to cooperative marketing campaigns.

    Nestle and Edeka declined to comment on any potential deal to end the dispute, which has emerged as the latest outward sign of tension between European retailers and suppliers at a time of changing consumer tastes and new online competition.

    Nestle, under the leadership of new Chief Executive Mark Schneider, is reeling from its weakest annual sales growth in at least two decades, which has prompted shareholder pressure to boost revenue and profit margins.

    It is due to release first-quarter sales data on Thursday.

    Reporting by Angelika Gruber and John Miller in Zurich and Jan C. Schwartz in Hamburg; editing by John Revill/Michael Shields/Susan Fenton

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