*

Retailers resist price hikes amid rising tariffs and

inflation

*

Brands face margin squeeze, retailers demand price cuts

*

Retailers develop own-brand alternatives to counter price

hikes

By Helen Reid

LONDON, Aug 7 (Reuters) - Caught between rising costs

from tariffs and belt-tightening consumers, big retailers are

clashing with the producers of consumer brands such as

Nivea-maker Beiersdorf and brewer Heineken,

as they look to avoid sticker shock that could hurt sales.

The disputes - which have dented some brands' sales -

underscore the challenge for consumer goods makers and sellers,

with inflation and tariffs pushing up input costs and price

spikes in commodities such as coffee.

While pricing talks have never been easy, tariffs are

escalating already high food inflation since the pandemic,

making grocery bills more contentious and political as consumers

grapple with a cost-of-living crisis.

"We all should be very well aware of consumer budgets,"

Frans Muller, CEO of supermarket company Ahold Delhaize,

which owns U.S. chains Food Lion, Hannaford, and Stop & Shop,

told Reuters on Wednesday.

He said conversations with consumer goods companies over

pricing were "tight," adding that the industry's focus was on

increasing sales volumes rather than increasing revenue by

hiking prices.

"That is the wrong way of supporting customers and the wrong

way of growing the business itself."

Ahold has in-house teams that track commodity, energy, and

labour costs, and own-brand products it can compare with to

establish whether price increases demanded by consumer brands

are justified or not, Muller said.

On the other side of the equation are the brands, facing

higher costs that are squeezing margins.

Beiersdorf CEO Vincent Warnery said on Wednesday that

retailers in key markets, including Germany and France, had

pushed back strongly in price talks last quarter, not only

refusing price increases but asking for price reductions, and

pulling products from shelves.

Beiersdorf eventually agreed to a 2.6% rise, Warnery said,

but delistings of some products by retailers knocked two

percentage points off its sales growth in Europe in the second

quarter.

"There will be a lot of price changes pushed forward by

consumer brands, some will be accepted by retailers and some

will not," said Bobby Gibbs, a Dallas-based partner at Oliver

Wyman who advises retailers and consumer goods firms.

Manufacturers will find it easier to push higher prices

through on products where there is brand loyalty and fewer

strong private label alternatives, Gibbs said.

Reuters' global tariff tracker shows at least 102 out of

nearly 300 companies monitored by the tracker have announced

price hikes in response to the trade war, with about 41 of them

in the consumer sector.

As well as tariffs, other factors like the cost of capital

and labour, and commodity prices in the case of coffee and

chocolate, are pushing prices up on certain products, Gibbs

said.

Trump has said the tariffs counter persistent U.S. trade

imbalances and declining U.S. manufacturing power, and that the

moves will bring jobs and investment to the nation.

MORE PRICE HIKES AHEAD

More price hikes are planned, particularly in the U.S.

Tide detergent maker Procter & Gamble ( PG ) last week said

it was raising prices on about a quarter of its products in the

U.S. by a mid-single-digit percentage as part of efforts to

mitigate the cost of higher tariffs on imported goods. That will

affect pricing at Walmart ( WMT ), Target ( TGT ), and other

stores.

As talks heat up, more retailers could pull branded products

temporarily as a negotiating tactic, as Ahold's Albert Heijn

chain did this year in a dispute over price hikes by coffee

roaster JDE Peet's.

Dutch brewer Heineken last week said its beer

sales were dented by a price dispute with European retailers.

"Many retailers are getting more sophisticated in how they

can measure product switching ... so they're willing to be

bolder on delistings because they're able to protect sales and

margin more than they would have in the past," said Gibbs.

In Europe, retailers are joining forces to increase their

clout in pricing talks. Carrefour said last month it

had created a new European buying alliance called Concordis,

along with rival group Coopérative U, and is in advanced

discussions with other European retailers to expand the

alliance.

Supermarkets are developing more own-brand alternatives to

big-name brands. Ahold has introduced 300 new own-brand products

this year in its U.S. chains, and sales growth in those has

outpaced the rest of the store, it said.

Big brands have taken note, with P&G's Chief Financial

Officer Andre Schulten saying last week that retailers have been

implementing "more aggressive pricing" on own-brand products.

"We see some level of pressure to drive trade down because

of price promotional behaviour," he said, referring to consumers

swapping to lower-priced products, adding the market would

remain "volatile and challenging".