Are you a fan of Kinder chocolate? Uncle Ben's foods? L'Oreal Studio line?

If so, you will have to start looking elsewhere than your friendly local Coop, as in the coming weeks these will start to disappear from their shelves and won't return.

In total, 95 products are affected. This is according to today's Tages Anzeiger (original articles in German, here and here here). The reason being that Coop couldn't get the producers to lower their prices in light of EUR/CHF differences, and Coop is going to make an example of them.

Seriously? Soon, the entire product line will fit into a small 7-11. *sigh*

Also on Coop's site itself: Genug ist genug

And for the francophone EFers (yes, I know, we are a minority on EF) here is another link: Trop, c'est trop. Also from Le Matin, Franc fort: les grands distributeurs cassent les prix:

Its a negotiating tactic and I would expect that this article was produced by Coop PR department to put pressure on the manufacturers.

Truth is - supermarkets can't live without brands and brand can't live without supermarkets - it will be resolved very soon, I bet

They must read EF

95 products ? From how many ? Don't delude yourself that free competition will suddenly materialise overnight. The supermarkets are only acting at all because their cosy little environment is threatened by extreme environmental factors outside their control.

What was the price premium being paid over EU markets in times of exchange stability ? Are the protectionist policies being dismantled ? Are the swiss customers demanding real change and applying real pressure ?
IS competition in product and service being embraced to raise trhe bar ?
Or are local consumers simply convinced that swiss-is-best and local farmer/manufacturers/retailers should be support at huge premiums ?

Try asking a few swiss people such questions and check for the "Ah Yes but...." response.

AYB

Pffft French. w/e!!!!

Funny how when you go to their website you can read all about it in DE/FR/IT but when you click the EN you get Aldi (generic).

That's all well and good, but as the final retail outlet in the supply chain, Coop are most likely to have the highest proportional mark up percentages in the supply chain. It's up to their purchasing department to procure sellable items at the best price of course, but you can bet your last CHF that Coop (nor any other retailer) would withdraw a product that is making them a tidy profit. I see this announcement as a public relations act to appease the Swiss public and politicians.

It would be of more use to a lot of people if they'd accept Euros as a form of payment at a realistic exchange rate. Retailers need Euros to pay their European suppliers, so they could forego the exchange rate profits that they've been making all year in my opinion.

__________________
Crash your karma into little bits of happiness

Then would it make more sense for Switzerland to join the Eurozone?

Would it make more sense for the US to switch to the Yuan since they buy everything from China anyway?

Its got nothing to do with any of these things. Large multinationals negotiate pricing with supermarkets once or twice a year - this is obviously that time of year for these manufacturers. Coop are trying to look after their shareholders, Mars are looking after theirs (well - two guys anyway!). The discussion will be about goods that are produced outside Switzerland under euro cost structures, and sold to the Swiss consumers. Coop will be trying to persuade them to take their share of the pain.

Nothing to do with the consumers, I'm afraid....just capitalism at work

The coop Wiki describes the company as "wholesale distributor" and oen of the two largest in Switzerland. In other words they have a dominant position in many of their markets. For them to give the impression that they are at the mercy of the importers is disingenuous at best.

AYB

It isn't about whether it makes a profit or not.....its about whether it makes MORE profit than the thing which takes its place on the shelf. Shelf space in retailers is at an absolute premium, and if they have found a Nestle product to replace a Ferrero or Mars one.....then they'd take it

Well, that explains why there is a long aisle filled with chocolate at the grocery store and only kind of mustard....well, two, if you count the difference between yellow and darker yellow. Soon, I'm just going to start feeding my kid chocolate for every meal...paradise.

It's not the producers to blame, it's the importers. Coop (like most retailers in Switzerland) can not buy Euro products directly from the manufactures, instead they're forced to buy from licensed importers. It's these importers who are refusing to lower prices.

Of course they are.....they do nothing other than distribute but what the manufacturers make.

Its a symbiotic relationship in its purest form - they are totally dependant upon each other - trying to say who is right or profiteering is too blunt a view. They find a balance (usually) and stick to it

Is that right? That surprises me if true - I can't imagine that Mars, Kellogs, Coke etc need importers and I can't imagine that either party enjoys paying a margin to a middle man.

Why don't they do it directly?

This has nothing to do with exchange rate stability, competitive pressure and the consumer ?

In a more competitive environment the consumer would be able to vote with their feet and buy from retailers that are more fluid with their pricing structures. Without the consumer these companies are nothing. To think otherwise is to simply to reinforce what many well travelled consumers suspect about swiss retailing: that value/for/money and a customer service is unimportant.

In a situation where you have the choice primarily of the Migros/Coop combo their is little incentive to make any effort to revise the pricing structures. Do you think prices are fixed firm by importers per year for FMCG ? Don't you think they would be pretty poor negotiators if they had not embodied hedging (even on the importer side) and the ability to capitalise on such exchange-rate moves in their commercial arrangements ?

Of course it is about capitalism and these companies trying to maximise profits, but are they doing so in a way that does not unfairly disadvantage the consumer ?

Go Figure.

AYB

So what's the upshot? Will Coop lower their prices, by how much?

I don't think that this press release has, no - but your other points are all valid for the macro economic isses facing organised trade etc