If you have walked the pet food aisle of the supermarkets recently, you may be wondering where half the pet food has gone. Coles and Woolworths both have about a third of food “temporarily out of stock”. But no one is talking about why.
It turns out that all the dog food that is missing are Mars brands- one of the biggest pet food companies in the world. Brands we are talking about here are Pedigree, MyDog, Optimum & Whiskas. While rumours are flying around the internet about recalls and high energy prices, Coles, Woolworths and Mars are saying nothing. The union representing workers at the Mars plant in Wodonga let slip the truth.
It is all about price
It seems like Mars is trying to put up the price of a lot of their products and Coles and Woolworths don’t agree. So they are not buying anymore at higher prices. Now, these negotiations are complex and cover cost price, range reviews, rebates, marketing contribution, shelf space, sales and more. If any companies have the size and scale to negotiate equally with Coles and Woolworths than it is Mars and Nestle, so don’t feel sorry for them. For the shelves to be empty, this brinkmanship must have been going on for at least 2 weeks, probably a month.
Adding to the complexity is that the supermarkets now have their own dog food brands, and they have been gradually taking space from the likes of Mars & Nestle.
What about the customer?
So, these giants are battling it out over price, terms and margins but have forgotten all about supplying food to their loyal customers! Not only that, they don’t even let customers know the real reason products are not available.
You can see why, when Mike & I decided to make a better dog food, we wanted to avoid this retail battleground and go direct to customers ourselves. We did not want to have the retailer applying price pressure – which often leads to a compromise on lower quality ingredients.
(It seems that Coles and Mars have now come to an agreement and product will start flowing again soon. No word on Wollies yet.)