Grocers End Nestle Boycott After Two-Month Price Dispute

(Bloomberg) -- Nestle SA has ended a dispute with a group of European retailers that kept hundreds of products from the world's largest food company off shelves.

The Swiss company came to a “balanced agreement” with supermarket purchasing group Agecore, a spokesman said. He declined to provide details.

The agreement comes more than two months after Agecore and its members, including Germany's Edeka, Colruyt in Belgium and Coop in Switzerland, started a boycott of Nestle products to pressure the company on pricing. Maggi seasonings and Thomy mayonnaise were among the delisted wares.

“Retailers likely got better, more equal price conditions, and Nestle potentially got a commitment to more shelf space or increased volumes,” said Jon Cox, an analyst at Kepler Cheuvreux. “I wouldn't be surprised if more retailers come back to Nestle to try and get better terms, given the very tough competitive environment for food retailers.”

Grocers are grappling with a shift to online platforms such as Amazon.com Inc. and tough price competition from discounters like Germany's Lidl and Aldi. That's been a driving force behind tie-ups like J Sainsbury Plc's $10 billion bid for Walmart Inc.'s Asda or Tesco Plc's acquisition of wholesaler Booker.

The Agecore alliance represents a tenth of the food producer's sales, according to Zuercher Kantonalbank. The two parties have agreed not to disclose details of the agreement, according to Germany's Lebensmittel Zeitung.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net.

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Lauerman

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