'They had a gun to our head' -- the amazing standoff at Coles over Tim Tams

Princess Mary shows a package of Tim Tams to her husband Prince Frederik of Denmark in Canberra. Lukas Coch – Pool/Getty Images

The supply of the iconic Australian chocolate-covered biscuit Tim Tams to the shelves of Coles was cut off as the supermarket and Arnott’s biscuits fought over pricing.

Arnott’s, which is owned by US food giant Campbell Soup, informed Coles it was increasing prices, from between 2% and 10%, of 54 lines of biscuits.

The Wesfarmers-owned supermarket chain said it first wanted to discuss this.

“Coles has made a commitment to bring down the cost of shopping for our customers, and we have been doing that every year for the past six years,” a Coles spokesman said.

“So when a major international manufacturer decides they will unilaterally force through a price hike without justification, we will resist that.”

Arnott’sstopped sending trucks to Coles. And so for two weeks in October, supermarket shelves weren’t being restocked with biscuits, including Tim Tams.

“They had a gun to our head,” one Coles executive told Business Insider.

According to The Australian, the biscuit war developed into a major battle of wills ­between a supermarket giant and supplier.

“It is rare for a major supplier to refuse to replenish stock to a supermarket chain due to a fight over pricing,” The Australian said.

Other supermarket food suppliers are watching the battle with interest.

Eventually Coles agreed to price rises for 44 of the 54 biscuits, including Scotch Fingers, Teddy Bears and and Monte Carlos.

The other 10, including Adriano Zumbo’s Coconut Creams, Choc Raspberry and Salted Caramels, are not being restocked. Tim Tam multi-packs are also not being resupplied.

Arnott’s wouldn’t publicly discuss the negotiations with Coles. However, the biscuit maker did say that there are no shortages Tim Tam supplies.

“They remain available for sale to all of our customers in Australia at our standard wholesale price,” a spokesman said.

“Like any business, we do review our prices and increased our wholesale prices in October. Our customers set the price at which they resell our biscuits to consumers, although we do collaborate with our customers to regularly fund promotions in-store.”

Prices at the two big supermarkets, Coles and Woolworths, are a big issue as they battle smaller competitors and new entrants to Australia, including discounter Aldi.

In the September quarter, Coles cut prices by an average of 1.3% and Woolworths by 1.82%. IGA, owned by Metcash, says its price deflation is running at 1.7%.

The Australian has more.

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