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This week in FMCG

FMCG-ThisWeekInNews-080618-7The new week has seen big waves in the FMCG industry. Major supermarkets lost CEOs while the Land Down Under saw the closing of a major FMCG facility. Read on to find out what happened across the sector this week.

Supply dispute at Woolies, Coles

Some consumers couldn’t buy their favourite pet food this week at Woolies, Coles due to a dispute over prices. Mars Australia refused to supply the supermarket giants due to them declining price increases. Mars Petcare owns leading pet food brands such as Whiskas, Pedigree and Royal Canin. The company said they’re currently “working through supply issues” and hope to bring back the pet food supply on shelves soon.

Woolworths’ $1.7bn buy-back after offloading petrol business

Australian retailer Woolworths Group has sold its petrol business to petrol company EG Group. Shareholders will receive a A$1.7 billion off-market buy-back. Woolworths chairman Gordon Cairns said the company will focus on “maximising shareholder value” and “return the proceeds from the Woolworths Petrol sale to shareholders. It has considered several capital return options. Cairns said he sees the company’s balance sheet will remain strong after the buy-back. It also revealed the planned closure of its Big W stores and distribution centres over the next three years.

Kaufland and Lidl CEOs resigned

German giant Schwarz Group owned supermarket giants Kaufland and Lidl’s CEOs resigned within weeks of each other. Kaufland boss Patrick Kaudewitz’s resignation led to a leadership reshuffle at the German hypermarket while its sister company Lidl’s CEO also left the grocery unexpectedly. Last month Kaudewitz left the supermarket after 26 years in the business due to personal reasons. Less than three weeks later, Hojer resigned after nearly two years leading the discount retailer. Schwarz Group CEO Klaus Gehrig has taken over the top position at Kaufland, and appointed a deputy, Gerd Chrzanowski, for the first time. 

Ferrero sealed US$1 billion deal with Kellogg

Cereal maker Kellogg has sold Famous Amos and its fruit snacks business to confectionery giant Ferrero for US$1.3 billion. The chocolate maker will acquire iconic cookie brands Keebler, Famous Amos cookies, Mother’s and Murray sugar free cookies and Little Brownie Bakers (Girl Scouts cookie supplier), as well as Kellogg’s fruit snacks business, including Stretch Island and Fruity Snacks and Keebler’s ice cream cones and pie crust products. Steve Cahillane, Kellogg chairman and CEO, said the company has reshaped its portfolio to lead to better growth. Ferrero executive chairman Giovanni Ferrero said the brands are an “excellent strategic fit” for them.

Kimberly-Clark’s Sydney facility closure

FMCG giant Kimberly-Clark Australia will move its production to Asia as it shuts down its Ingleburn Mill in Western Sydney, Australia. The owner of Huggies, Kleenex and VIVA brands closure of the plant will affect 220 local jobs. This move is part of its Global Restructuring Program. Doug Cunningham, managing director, Kimberly-Clark ANZ, said they are focusing on their employees and families’ welfare. Affected employees will be paid their full legal entitlements and redundancy pay, with outplacement assistance and counselling provided. Kimberly-Clark will still continue to manufacture Kleenex, VIVA and other Kimberly-Clark Professional products at its Millicent Mill in South Australia.

First Coca-Cola energy drink launched in Europe

Soft drinks giant Coca-Cola has revealed its first Coca-Cola branded energy drink in Europe. The new Coca-Cola Energy contains caffeine from naturally-derived sources, guarana extracts and B vitamins – without taurine – an amino acid often added to energy drinks. The Coca-Cola Company global chief marketing officer for sparkling business Javier Meza said was designed to fit its consumers’ busy lives.

Budweiser created new football pitch from recycled plastic cups

AB InBev’s beer giant Budweiser opened the new Budweiser ReCup Arena that is made with recycled plastic cups in Sochi, Russia. It used over 50,000 cups it collected to build a new football pitch. It also sold 3.2 million Budweiser Red Light Cups during the FIFA World Cup for sports fans. AB InBev Efes marketing director Konstantin Tamirov said that “Budweiser surprised fans with its activations, gave them euphoric emotions, so we decided to create a unique facility – Budweiser ReCup Arena.”

Stay tuned next Monday for the top industry stories on Inside FMCG.

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