Denmark’s largest retailer, Salling Group, has removed some of local dairy major Arla Foods’ products from stores in a disagreement over the latter’s pricing actions.
Salling, which owns the supermarket chains Netto, Bilka and Føtex, was quoted in Danish media outlets as saying “we don’t understand Arla’s price development” and that a dialogue with Arla can “best be described as a bit tough”.
Confirming Salling’s move in a response to a Just Food query, an Arla spokesperson said: “While current price negotiations are ongoing, it is correct that Salling Group have announced restrictions to select Arla products in their shops”.
Arla’s head of global media relations, Bjarke Munk Kamstrup, added: “We cannot comment on current negotiations but overall for Arla, it’s always a balancing act of maintaining a competitive milk price for our farmer owners to support their livelihood today and tomorrow, while also keeping our in-demand products at a level where they continue to be relevant for consumers.
“Right now, we are experiencing increasing prices on milk and fat on the European market and similar price increases have historically affected retail as a result.”
Last month, Arla warned that a milk production shortage and its impact on commodity prices could lead to retail prices increasing this year.
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By GlobalData
Peder Tuborgh, the cooperative’s CEO, said then that “supply and demand is slightly out of balance globally”.
He was speaking to reporters after Arla issued its first-half results.
Castello cheese and Lurpak butter brands owner Arla has not confirmed which of its products have been taken off the refrigerated units in Salling’s supermarkets but reports in Denmark suggest protein drinks and skyr are amongst the affected items.
The reports said Salling Group is now in the process of seeking alternatives from other suppliers.
Just Food has asked Salling Group for its comments on the dispute.
This is just the latest dispute between manufacturers and supermarket groups in Europe over pricing actions.
In April, French supermarket heavyweight Carrefour resolved a pricing spat with Walkers and Lay’s crisps owner PepsiCo that had led to the retailer delisting its food and beverage brands across Europe.
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