By and  on January 17, 2008

PARIS — France's E. Leclerc supermarket chain has publicly threatened to withdraw six products, including items by cosmetics giants L'Oréal and Beiersdorf, from its shelves on Feb. 1 if manufacturers don't reduce their prices.

The retailer, which built its business on promising low prices, took out full-page advertisements in daily newspapers here Wednesday, including Libération and Le Figaro, denouncing alleged price increases of 18 to 20 percent since August.

"Products too pricy?" reads the ad, in translation. "We only have one solution left: to no longer sell them. Shame!"

Under that message is a picture of the six products at issue and the percentage by which their prices were supposedly upped in the four months between August and January. Among them is L'Oréal Paris Men Expert Hydra Energetic Soins Hydratant Yeux Anti-Cernes eye cream, at plus 18.5 percent, and Beiersdorf's Nivea DNAge Renovateur Cellulaire day cream, at plus 18.4 percent. Other products include Laughing Cow cheese and an Ajax cleanser. Across the products are printed the words, reading in translation: "Pulled from shelves."

Also in the ad, Leclerc declares such hikes are not attributable to the rising costs of raw materials alone. Further, Leclerc blames French legislation for hampering competition by preventing retailers from deciding on pricing. (In France, laws disallow retailers to sell products below manufacturers' listed prices.) While Leclerc's chief executive, Michel-Edouard Leclerc, has long battled against the legislation, public threatening by the retailer to boycott products is a new tactic, which comes when concerns about purchasing power run high among French consumers.

"It's the first time we have seen this [type of campaign]," said René van Duijnhoven, Beiersdorf France's general manager. The company rejected Leclerc's accusation, calling the retailer's ad campaign deceptive.

"It gives the impression that we have increased the price to the consumer that amount, and that is not the case," continued van Duijnhoven, adding the percentage quoted in the ad is the tariff set by Beiersdorf before rebates are negotiated with retailers during yearly meetings on pricing.

"Since we have not yet negotiated the rebate for 2008, it is absolutely misleading information," said van Duijnhoven.

L'Oréal would not comment on Leclerc's ad Wednesday.
— Ellen Groves

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