Super-Sol yanks Unilever brands in tactic to get sweeter trade terms
Like in dispute with Leiman Schlussel, it's keeping customer favorites, such as Telma cereals
The newly beefed-up Super-Sol (TASE: SAE) is certainly not shying away from confrontation with its suppliers. TheMarker has learned that the supermarket chain, which recently swallowed rival Clubmarket for a billion shekels, is yanking a whole range of Unilever products from branch shelves as a negotiating tactic, to wrest better terms of trade from the manufacturer.
Super-Sol, which belongs to Nochi Dankner's IDB group, has also remained stoic at the notion of not selling Nutella spreads and Ferrero Rocher chocolates as it battles over terms with supplier Leiman-Schlussel.
As for Unilever, its big brands include Bagel & Bagel pretzels, Click chocolates, and Telma mayonnaise.
Insofar as is known, Super-Sol does not mean to withdraw Telma breakfast cereals and BlueBand margarine at this point. It has also left Kinder chocolates, which are provided by Leiman-Schlussel, on the grounds that it's a major brand.
Market sources say Super-Sol is careful not to ban favorites among customers, who might rebel at the thought of losing Telma cereals or Kinder "surprise eggs" for the kiddies. "They still want to make money," said one market source.
Sources near Super-Sol say the chain does not mean to get into the kind of brawl it had with Strauss two years ago. But neither does its management seem willing to bend on demands for sweeter terms from suppliers, even at the cost of reducing the range on the shelves.
The rating company ACNielsen says Supersol's market share has reached 40.5% after the purchase of Clubmarket, which had declared bankruptcy, and which Super-Sol bought for almost a billion shekels (including inventory). Blue Square Israel (NYSE, TASE: BSI) is No. 2 with a 24.1% market share.
Sources near Super-Sol say the chain is in talks with suppliers over long-term contracts, and add that the talks are conducted "professionally". But other sources in the market say Super-Sol is demanding terms that would not enable the suppliers to breathe.
Smaller suppliers can't withstand the pressure, say market sources, while big ones can flex muscles back. Insofar as could be ascertained, Super-Sol's talks over terms with Tempo have also turned acrimonious.
Super-Sol says it does not comment on its relations with suppliers. While Leiman-Schlussel wouldn?t comment at all, Unilever said it was negotiating with Super-Sol to achieve understandings for the greater good of the consumer.