Swiss retailer Coop has taken the extraordinary step of removing the products of several major international manufacturers that have refused to reduce their prices despite making massive profits from a buoyant Swiss franc.

"/> Swiss retailer Coop has taken the extraordinary step of removing the products of several major international manufacturers that have refused to reduce their prices despite making massive profits from a buoyant Swiss franc.

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FRANC

Coop takes ‘overpriced’ products off shelves

Swiss retailer Coop has taken the extraordinary step of removing the products of several major international manufacturers that have refused to reduce their prices despite making massive profits from a buoyant Swiss franc.

Coop takes 'overpriced' products off shelves
Marius Zierold

The supermarket has already started to phase out 95 products from well-known producers after failing to negotiate lower prices with their manufacturers.

“Enough is enough. Stop exchange rate profiteers. Delisting discount“, read the slogans of a prominent online campaign being run by the retailer. Coop says it is  fighting for reduced prices on behalf of its customers. Remaining stock is to be sold off for half price from next week, according to the website.

The main products affected are Studio-Line from L’Oréal, the Uncle-Ben’s range from Mars, and Kinder chocolates from Ferrero. Signs on empty shelves inform customers once products are sold out.

Coop wants to set an example with its action, Jürg Peritz, Coop head of sales and marketing, told the SonntagsZeitung newspaper.

“There is around a 50 percent chance that Coop will take measures on other top brands,“ he said.

Coop’s black list is topped by Nivea lines from Beiersdorf and Danone products like Evian and Actimel.

Coop said it had given the manufacturers in question an ultimatum to respond by noon on August 11th.

“This deadline was reached without the respective companies showing readiness to pass their currency gains on to the customer“, said Peritz.

The delisted products have a sales volume of about 30 million francs ($38 million), Coop spokeswoman, Sabine Vulic, told the news agency SDA.

The manufacturers did not want to comment on the matter, according to SonntagsZeitung.

Supermarket giant Migros is also planning to take action. Herbert Bolliger, head of Migros, said in previous weeks that he was ready to ditch the products of manufacturers that would not agree to lower their prices.  

According to reports, the retailer is currently in negotiations with L’Oréal, Ferrero and Nivea producer Beiersdorf. A likely decision to take these products off the shelves will be taken next week at the earliest“, said spokesman Peter Naef.

According to Beiersdorf Switzerland head, Erhard Schöpfer, the demands of the retailer are “entirely unrealistic“. 

Switzerland’s government, meanwhile, is planning to tackle the consequences of the strong Swiss franc as a matter of urgency. Finance Minister Johann Schneider-Ammann has plans to strengthen the power of the Swiss Competition Authority (Wettbewerbskommission) as well as offering tax breaks for export and tourism.

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MIGROS

Swiss retail giant Migros slashes prices on 600 products

Faced with the competition from Aldi and Lidl, Switzerland’s largest supermarket chain is now cutting prices by at least 10 percent on several hundred products.

Swiss retail giant Migros slashes prices on 600 products
Hundreds ofMigros products will become cheaper this year. Photo by AFP

Three-quarters of the discounted items are from the food sector and the rest are other consumer items.

Their prices will be reduced before the end of the year.

“The new price discounts should convince people to think of Migros when they are planning their purchases”, the company spokesperson told Swiss media outlet 20 Minuten. 

Migros, which has over 1,000 stores in Switzerland, owns not just grocery shops, but also sports, electronics, and hardware stores, as well as a bank and adult education centres.

The behavioural economist Tilman Slembeck from the Zurich University of Applied Sciences said Migros is “under pressure to act” in order to compete with cheaper supermarkets like Aldi and Lidl.

“There is constant pressure from the discounters”, he said.

READ MORE: Switzerland ‘the most expensive in Europe’ for bread and meat 

In the end, consumers might be the winners in the price war.

For instance, red peppers now cost 3.30 francs per kilo instead of 3.80, the price of M-Classic butter waffles went down from 2.70 francs to 2.20, and the six-pack of 1.5-litre bottles of Aproz mineral water are 2.85 instead of 5.70.

You can see other price reductions here. 

The range of cheaper M-Budget products, aimed at those with low incomes, is being extended. But its price will not be lowered as it is already at hard-discount level.

Food and many other products sold in Switzerland are more expensive than comparable goods in the EU. 

A recent study from Eurostat database shows that there’s nowhere on the continent where bread is more expensive than in Switzerland, where its cost is 1.64 times higher than the European average. 

Milk, cheese and eggs cost around 1.4 times more than they do elsewhere in Europe. 
 

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