Power battles

The media seems to be full of power battles that are going on in Belgium. Very fascinating stuff to follow:

  1. Unilever Belgium wants guarantees from a major Belgian supermarket multinational Delhaize to take their entire product range + execute a price increase.
    Delhaize who operates mainly in the USA (Food Lion, Bloom, Harveys, Hannaford, Sweetbay, Bottom Dollar, ...) refuses to take all of their products and has taken 50 up to 350 Unilever products out of the shelves in the 775 Belgian stores. Those are major common brands like Lipton, Dove, Signal, Solo, Knorr, Zwan, Axe, Rexona, Ola, Sun, Effi, ...

    Both start playing with the media: Delhaize claims Unilever wants a 30% price increase (this includes fines Delhaize'd get if they don't offer the entire product range), Unilever says the price increase would only be 2,5%.
    Unilever invites in big newspaper advertisements to shop for their products in other supermarkets.

    I find this very very fascinating. As a consumer I obviously like a bit of power battle that can temper price increases. I am not particulary brand-minded and I easily buy store housebrands for most products. But some products I value more and for those I do trust the "secure brand" more (sometimes after disappointing experiences with the cheaper brands) eg deodorant, dishwasher soap & laundry soap, ...
    I also know that the severe price ware between supermarkets in the Netherlands have lead to less choice in their stores! I'd hate that to happen and surely in Delhaize which is the store where you go to find those products you don't find in the other supermarkets. So if they keep this up it'd hurt their market positioning in the long run!

    As an employee from a consumer good producer I also know what an incredible power these distributors have gained. Trust me: selling from producer to supermarkets has an almost zero margin already! Giving them even more power would be unhealthy.

    As a shopper I don't feel impacted since I alternate shopping in Delhaize and Carrefour so if I truly want a brand that isn't available anymore in Delhaize, I'll find it elsewhere, but I might as well take an alternative within Delhaize if I'm there.

    Hmmm an oligarchy market....interesting.

  2. Remember our federal government crashing over the bank Fortis? Remember this bank was at crisis and the government intervened, bought the bank and then sold it to the Frensh PNB Paribas resulting in a very much lower shareholder value?

    Well the shareholders went to court and there they ruled (despite the government interventions that made that government crash) that the sale could not be legal if the shareholders could not vote over that transaction.

    Well today was the new shareholder meeting while the sale to PNB Paribas had been frozen. You could feel in the past week the power battle building up: the government trying to propose a slightly changed deal, the Fortis directors sending out doom visions in case of a no-vote, consumer organisations recommending to vote No, lawyers grouping shareholders giving interviews, etc.... This almost felt like elections. Newspaper "breaking news" e-mails were send out "how would you vote?" etc etc.

    The previous shareholder meeting had very heated emotions and most of the newly proposed board members got voted away again while security agents needed to make some interventions. And this time was no less emotional: sheering, booing, shouting, hats with "NO" stickers on them, slogans "No we can't", ...not quite as I imagine myself a "boring shareholder meeting". No a pure day-long power battle with constant newsflashes in all news.

    And the no-voters got a 50,3% advantage. What now is not clear at all. Despite the no-vote to the government buying the entire bank, they are somehow the legal owners after all, but they can't sell the bank to PNB Paribas anymore despite some contractual engagements already. Lots of legal battles to be followed as well as a new political struggle and the need to find a new solution for Fortis who is now again more at risk.

Comments