Super-Sol May Cut Supply of Ferrero Rocher Over Spat With Supplier

But it wouldn't stop marketing public's favorite, Kinder chocolates, from the same supplier Leiman Schlussel

Bad news for aficionados of Ferrero Rocher chocolates and chocolate spreads: you may not be able to get them at Super-Sol (TASE: SAE)</TMC> because of a dispute with supplier over terms of trade for 2006.

Leiman Schlussel markets not only Ferrero Rocher but Kinder, Locare, and Nutella spread.

Super-Sol isn't about to shoot itself in the cash register, though. It will apparently continue to carry Kinder chocolate products, which are a leading brand.

Every year Israel's retail chains and suppliers duke it out as the trading year begins and it is not new that the disagreements can lead to breakdowns in supply to consumers. This year the battle is all the fiercer because Super-Sol, which is controlled by Nochi Dankner's IDB (TASE: IDBH) group, bought Clubmarket and now controls about 40% of Israel's retail market.

The beefed-up Super-Sol chain had already announced that it expects its suppliers to sweeten their terms of trade, in view of the bulk procurement it would be assuring.

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 and Leiman-Schlussel refused to comment at all.