Pricing conflict – resignations, court cases and tractor revolts

Our previous installment of Power to the Pricing People was all about love as we brought you a special Valentine’s Day edition.

In this week’s episode, things are heating up again but for all the wrong reasons. From high-profile supermarket resignations to courtroom drama and farmer protests, we’ve seen a spike in pricing controversy.

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Woolworths walkout

In Australia, we saw grocery giant Woolworths lose its CEO, Brad Banducci, following a dire television interview addressing the stranglehold Australian supermarkets have on shoppers and suppliers. In the past year, suppliers have become increasingly vocal about Woolworths’ alleged use of its market dominance to push down prices, resulting in a government-sanctioned year-long investigation by Australia’s competition regulator, the ACCC.

With high rates of food inflation prevailing across the globe, the drama of Brad Banducci’s departure highlights the balance supermarkets need to strike between shielding profit and shareholder returns and maintaining supplier relationships, customer loyalty and social license.

Wine prices on trial

Meanwhile in Europe, French wine negociants are feeling the hangover of a €350,000 fine for paying “abusively low” prices to wine growers, with some wine growers reporting being forced to sell at 25% below the cost of production. The landmark case sets an important precedent in the long-running tension between producers seeking fair payment and bulk buyers seeking margin.

Farmer frustration

While in France pricing conflicts were taken to the courts, pricing disputes have spilled onto the streets in Britain. British farmers have been protesting over low supermarket prices and cheap food imports from post-Brexit trade deals by organizing tractor “go-slows” and blockades, causing mass-disruption.

In an even more extreme act, British sheep farmers torched their own wool to highlight its devaluation. The protesters are seeking to draw attention to the discrepancy between low farm gate product prices and high grocery inflation, arguing manufacturers and retailers are profiteering at their expense.

Achieving pricing peace

Across the world, pricing is becoming increasingly contentious and the stakes for getting it right are higher than ever. Businesses need the ability to price with accuracy, confidence and control while reacting at pace to market changes. If you feel like pricing pandemonium could be heading your way, don’t wait for things to escalate, get in touch today.