Unilever, Delhaize End Month Long Fight Over Product Supply

Unilever NV (UNA.AE) and Delhaize Group (DELB.BT) Friday ended a month-long disagreement over the supply and price of a range of Unilever products in Belgium.

The "balanced agreement" is a positive outcome for both parties, the companies said in a short statement.

Delhaize Belgium in early February removed some 250 products from its stores following a disagreement with Unilever over the selection of products Delhaize wanted to carry, and their price.

Delhaize accused Unilever of trying to push a broad range of goods into its stores, many which the grocer did not want to stock because it found them to be unpopular. However if it refused to carry these items Unilever had threatened to raise prices by an average of 30% for the remaining items, Delhaize said.

What brought the unusual public quarrel to an end is still unclear as both companies declined to disclose further details of the agreement, but analysts broadly agreed that the end of the fighting was positive for both companies.

"The fact they've kissed and made up is certainly good news for Unilever," said Shore Capital analyst Clive Black. While not a huge issue for either company, it was one of the more "significant spats" he can recall between a retailer and a producer.

KBC's Pascale Weber said that the fight had highlighted the difficult position suppliers are in the economic downturn, where supermarkets' own brands often gain in popularity due to price comparisons. However some people are really "brand concious" and overall it is good for both companies that there was an agreement, she added.

Delhaize which does over two thirds of its business in the U.S. had been the only large retailer in Belgium that hadn't agreed to an overall price rise this year.

-By Peppi Kiviniemi, Dow Jones Newswires; [phone]; [e-mail]

(Michael Carolan in London contributed to this article)