Price Negotiations in 2026: Best Practices

The past few years of high inflation have strained FMCG supplier–retailer relationships across Europe and North America. Manufacturers’ input costs for commodities, energy, transport, and packaging have surged, yet retailers fiercely resist price increases to protect shoppers’ wallets. This standoff has led to annual negotiations turning acrimonious – even leading some retailers to cancel promotions or delist top brands when talks break down. For example, in early 2026 Belgian grocer Delhaize abruptly scrapped all promotions for Procter & Gamble products citing “difficult negotiations,” sending a clear signal that it had “reached its limit” on price hikes. Across markets, similar conflicts have erupted as retailers and suppliers spar over who absorbs inflation. In this climate, FMCG suppliers must adopt savvy strategies to push through necessary price increases without destroying retailer goodwill or losing shelf presence.

In this post, we analyse the best practices for negotiating price increases – highlighting what works (and what doesn’t) – followed by five real-world examples of tough but ultimately successful price increase negotiations. We conclude with a concise summary of best practices for FMCG managers seeking to address these challenges.

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Best Practices for FMCG Suppliers to Push Through Price Increases

1. Build a Data-Backed Rationale – and Go Beyond Cost Inflation Simply pleading that your costs are up is not enough. Retail buyers hear every supplier claim costs have risen. Instead, present a nuanced, data-backed case. For instance, use consumer insights and price elasticity data to segment where shoppers are less price-sensitive. Analyze which products or pack sizes can bear a higher price based on value perception. Conjoint analyses or econometric models can identify segments willing to pay more (e.g. for sustainable or premium offerings). A one-size-fits-all increase appears arbitrary; a targeted increase with a “willingness to pay” rationale shows you’ve done your homework and minimizes volume risk.

2. Reframe the Increase as Mutual Value Creation  Shift the conversation from cost recovery to category growth. Retailers care about sales and margins, so illustrate how a price change can expand category value or profitability for both parties. For example, argue that a modest price lift will fund innovation to attract new shoppers, better quality, or marketing that grows category sales long-term. Emphasize opportunities like trading consumers up to premium tiers or new uses that offset volume dips. When the buyer sees a price increase as fuelling category investment (rather than just strengthening your margins), they’re more receptive. Don’t just sell a price hike – sell a growth plan.

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3. Quantify the Cost of Not Raising Prices Help the retailer see the risks of inaction. If you cannot raise prices at least partially, what are the consequences? Perhaps certain low-margin SKUs will become unviable and be discontinued, reducing category assortment leading to losing shoppers. Maybe you’ll be forced to cut back on trade promotions, new product launches, or customer service levels if inflation isn’t addressed. By spelling out the trade-offs, you shift the discussion from “manufacturer vs. retailer” to a shared problem of sustaining the category. Calmly explain that without relief, something’s gotta give – and that could ultimately hurt category sales or the retailer’s own margins (e.g. if supply issues arise). This isn’t a threat; it’s a reality check that holding price flat isn’t “free” – it may erode value in less visible ways.

4. Provide Whole-Category Impact Analysis Rather than debating item-by-item margin, show the total category impact of your proposal. Use Accuris switching models to project how the category’s sales value, profit mix, and price index will change with the increase. For example, demonstrate that even if volume dips 2%, the category revenue might rise 5% – and that competitors are likely to follow with similar increases, preserving a level playing field. Show effects on the retailer’s own-label products too. By widening the lens, the discussion moves from a contentious SKU-level fight to a strategic review of category health. This makes it easier for the buyer to justify an increase internally as a category-enhancing move, not a one-off concession.

5. Simulate Shopper Reactions with Evidence Anticipate the classic buyer objection: “We’ll lose customers if we raise prices.” Come prepared with shopper research or pilots from similar markets. Use behavioral data or switching simulations to predict outcomes: what % of consumers might switch to cheaper brands or private label, versus stay loyal? How much volume might shift to other retailers? Are some shoppers more loyal to your brand than price? If you can show, for example, that a 5% price increase would only push 10% of customers to trade down (and mostly in less loyal segments), you reduce the fear factor. Retailers may still be nervous, but concrete scenarios beat vague assurances. Importantly, discuss how you’ll monitor post-price increase impacts (perhaps via a “shopper sentiment index” shared with the retailer) to catch any adverse trends early. This collaborative monitoring builds trust that you won’t “dump and run.”

6. Optimize Trade Spending Alongside Price: Consider tweaking the base price vs. promo mix to reach a compromise. Often the tussle is about list price, but shoppers experience the net price after promotions. You might propose a smaller list price increase but agree to shallower promotions or fewer multi-buy deals, so the average realized price rises to the needed level. This can be a win-win: the shelf price move is less dramatic for consumers, and the retailer saves on funding deep discounts. Emphasize that this could simplify pricing perception (fewer yo-yo promos) while protecting margins. Such creative structuring signals that you’re flexible in achieving the margin goal, not just pushing a blunt price hike.

7. Offer Conditional Commitments If a retailer is still balking, consider “sweeteners” linked to accepting the increase. For instance, Inflation-linked promotional guarantees: pledge a certain level of promo support for the next year – but only if the new price is agreed now. This gives the buyer something tangible in return (assured promos), framing the increase as part of a longer-term plan, not a one-off grab. Another idea is a “failure rebate” or trial period: implement the new price but agree on key sales metrics to watch – if the product underperforms (e.g. volume falls more than X%), you’ll compensate via an extra discount or rebate. This risk-sharing proves you’re confident the increase is sustainable and removes some fear for the retailer. Such mechanisms should be used carefully, but they can break deadlocks by aligning incentives.

8. Tailor the Narrative to the Retailer’s Priorities A generic pitch can fall flat – instead, speak the retailer’s language. If you’re negotiating with a hard discounter, focus your justification on maintaining “everyday low price” positioning and show how the increase keeps value tiers intact. If it’s a premium-focused grocer, highlight improvements in quality, sourcing, or innovation that the price supports. For a retailer obsessed with margin, show precisely how their penny profit per unit and category margin are preserved or even improved despite the cost increase. By demonstrating that you understand their business model and customer promise, you appear as a partner solving a joint problem, rather than a vendor pushing costs. This empathetic approach builds goodwill and can differentiate your negotiation from others on the buyer’s plate.

9. Maintain a Long-Term, Relationship Mindset Lastly, frame your approach in the context of a long-term partnership. Get top management involved to underscore that this is a strategic issue, not just a sales ploy. If you’ve routinely implemented small annual increases, continue that cadence – consistency prevents the shock of a huge one-time jump. Conversely, if you haven’t raised prices in years, acknowledge that and show you’ve exhausted internal efficiencies first. Throughout negotiations, avoid combative tactics like surprise supply cuts or public shaming of the retailer – those can permanently damage trust. (In fact, some suppliers who took an ultimatum approach ended up with year-long delistings, losing significant volume – a cautionary tale we’ll see later.) Instead, engage early, transparently, and at multiple levels to find a solution. A collaborative tone – “How do we jointly get through this margin pressure?” – is far more effective than threats. As one industry veteran put it, price increases are above all a “boardroom topic”: they require clear strategy, CEO/CFO support, and impeccable execution to carry through.

What NOT to Do

Experience has also shown some pitfalls to avoid. For example, waiting too long and then demanding a huge jump in price with no preparation is a recipe for failure – it blindsides the buyer and invites a hard “no.” Similarly, focusing only on your cost inflation and not on product value or consumer benefits is a common mistake (87% of companies make cost the sole message, which undermines their case). Blanket percentage hikes across all SKUs also tend to irk retailers, who see it as lazy and unfair – it’s better to differentiate by SKU elasticity and strategic importance. Finally, issuing ultimatums or halting deliveries prematurely can backfire badly if the retailer calls your bluff. Many European brands learned this the hard way: one major brewer’s volume plummeted over 12% in grocery channels after key retailers delisted its beers amidst a price fight. In another case, a food giant that pulled its products ended up off shelves for 18 months, sacrificing market share before a compromise was reached. The lesson: push firmly for your increases, but don’t burn bridges – an agreement that preserves the relationship is better than a pyrrhic victory.

Case Studies: Challenging but Successful Price Increase Negotiations

To illustrate these principles, here are five notable examples from Europe and North America where tough negotiations eventually led to the retailer accepting price increases. Each case offers unique insights beyond the obvious, showing what tactics or context helped break the impasse:

1. Kraft Heinz vs. Tesco (UK, 2022) – The “Beans and Ketchup” Showdown. In mid-2022, Tesco (Britain’s largest supermarket) and Kraft Heinz became embroiled in a high-profile dispute over Heinz’s request for hefty price increases on staples like baked beans, tomato ketchup and soup. When Tesco refused to “pass on unjustifiable price hikes” to shoppers, Heinz paused shipments, leading to empty shelf space for beloved products. The clash – dubbed a throwback to 2016’s “Marmitegate” – underscored the inflation-era tension over who should bear rising costs. What’s interesting is how quickly both sides felt the pressure: Tesco pointed shoppers to alternative brands, while Heinz faced public backlash (summer BBQ season with no Heinz ketchup was unthinkable!). After about a two-week stalemate, the two companies struck a deal in early July 2022 to restore supply. While details were not disclosed, industry chatter suggested compromise – Tesco likely accepted some price increase, and Heinz might have offered promotional support in return. The successful resolution hinged on the brand’s strength (“essential” items for consumers) and the timing – neither party could afford prolonged gaps on shelves during peak season. For revenue growth managers, this case shows the power of a strong brand (Heinz held out and achieved increases) but also the need to resolve fast to avoid lose-lose scenarios.
   

2. Mars Petcare vs. Tesco (UK, 2022) – Pet Food in the Crossfire. Just as the Heinz-Tesco dust was settling, Mars, the maker of Whiskas, Pedigree, Dreamies and other pet food staples, hit a similar impasse with Tesco. In July 2022 Mars halted supplies of its pet foods to Tesco after the retailer resisted price rises reportedly above 30%. This was Tesco’s second major fallout with a big supplier in weeks, signaling that Tesco was drawing a hard line on inflation. Store checks showed gaps in the pet aisle and tags warning that no stock was expected for weeks – Tesco was clearly willing to let popular brands run out rather than accept steep increases. Mars, on the other hand, was grappling with soaring meat and ingredient costs in pet food. The interesting twist is how Tesco leveraged its private-label alternatives here: Tesco and its discount arm highlighted their own pet food brands as cheaper substitutes. This put pressure on Mars, fearing lasting share loss if customers switched permanently. Ultimately, by late July 2022, Mars and Tesco quietly reached an agreement (similar to Heinz’s) and products returned to shelves. Mars likely accepted a smaller increase than initially sought, but crucially got Tesco’s acknowledgment that some rise was warranted. The case underlines the importance of timing and united front – Tesco, emboldened by consumer support for price restraint, used back-to-back showdowns to demonstrate its stance, but in the end even the UK’s largest retailer had to accommodate suppliers facing real cost pressures. For suppliers, it exemplifies that a strong portfolio (Mars had pet food and confectionery leverage, though the latter wasn’t pulled) and highlighting pet owners’ brand loyalty can strengthen your hand – yet flexibility (perhaps phasing the increase) may be needed to seal the deal.
   

3. Nestlé vs. Albert Heijn (Netherlands, 2022) – Showing Resolve, Then Finding a “Good Conclusion.” In early 2022, Dutch market leader Albert Heijn (part of Ahold Delhaize) took the dramatic step of removing dozens of Nestlé products from its stores amid protracted price negotiations. Iconic brands like Maggi, KitKat, and Nescafé vanished from shelves for a period because Albert Heijn refused to accept Nestlé’s proposed increases. Ahold Delhaize’s CFO explained that they flatly told Nestlé “we just don’t take prices if they’re not acceptable”. This hardball approach was intended to protect shoppers and the retailer’s margins during a wave of inflation. What followed was a test of endurance – with both sides losing sales – until ultimately a “good conclusion” was reached and Nestlé products returned. The details of the settlement were not public, but Ahold’s CFO noted they succeeded in ensuring “only the most necessary costs” were passed on, suggesting Nestlé had to moderate its demands. For Nestlé, however, getting back into the Netherlands’ biggest grocer was a win – it likely obtained some price increases (Nestlé later reported raising prices ~3% in Europe in Q4 2021). The key takeaway is the role of leverage and alliance: Ahold Delhaize used its scale and even European trading alliances to withstand supplier pressure, forcing a delay. But Nestlé’s breadth of must-have brands meant a deal had to materialize eventually. Revenue growth managers can glean that in markets with strong retailer buying coalitions, suppliers must be prepared for longer stand-offs and come with rock-solid justification – yet if the products are truly essential for the assortment, retailers will come back to the table once a face-saving compromise is found.
   

4. Mars vs. Edeka (Germany, 2022–2024) – A Marathon Standoff with a 1.5-Year Resolution. Perhaps the most dramatic example of a price war in recent memory, this conflict saw Mars, Inc. (covering pet food, confections, and more) completely pull its products from Germany’s largest grocery chain, Edeka, and its discount partner Netto, in mid-2022. Mars demanded an increase reportedly around 20% on average, citing unprecedented cost inflation, which Edeka deemed unacceptable. In an unprecedented scale of delisting, around 300 Mars products (from M&Ms candy to Uncle Ben’s rice to Whiskas cat food) disappeared from Edeka’s shelves. Edeka retaliated publicly – posting on social media about how its private-label alternatives were “64% cheaper” and just as good – framing Mars as greedy and itself as the consumer’s champion. This high-stakes deadlock dragged on for 18 months, far longer than most, illustrating extreme resolve on both sides. The breakthrough came in early 2024: Mars and Edeka finally struck an agreement and Mars products gradually returned to stores. Notably, Edeka announced that the agreement featured “lower prices and better terms” than what Mars initially sought – a clear signal that Edeka’s patience paid off in securing a concession. Even so, Mars regained access to a huge market, surely with some level of price uptick to cover its higher costs. This case is rich with lessons: Mars’s multi-category portfolio gave it some resilience (German shoppers could still find Mars chocolates at other stores during the fight, or switch to competitors, hurting Mars). Edeka’s strong alternative assortment and legal maneuvers (they even took Coca-Cola to court in a similar dispute) showed the power of a determined retailer. In the end, the “successful” outcome – a deal on prices – was hard-won. It underscores that brand power vs. market power is a delicate balance: even giants like Mars must sometimes yield on price, but by holding out it likely minimized margin erosion across Europe (sending a message to other retailers). For revenue managers, this saga warns that scorched-earth strategies (total delisting) are very costly, and that success may mean settling for half a loaf. The true “win” was getting back into Edeka before permanent brand damage was done.
   

5. PepsiCo’s Frito-Lay vs. Loblaw (Canada, 2022) – Chips are Down, Prices Up. Inflationary showdowns haven’t been limited to Europe; one of North America’s biggest clashes came in early 2022 between PepsiCo’s Frito-Lay snack division and Loblaw Companies, Canada’s largest supermarket chain. As ingredient and transport costs soared, Frito-Lay sought to raise its wholesale prices. When Loblaw – known for a hardline on pricing – refused, Frito-Lay stopped shipping its hugely popular chips (Lay’s, Doritos, Cheetos, etc.) to Loblaw in February 2022. For over two months, Canadians saw thinner snack aisles at Loblaw-owned stores, which leaned on house brands like President’s Choice to fill the gap. This high-profile “snack attack” garnered media attention, and Loblaw positioned itself as shielding consumers from supplier greed. Yet, PepsiCo held firm that it faced “unprecedented pressures” and was simply asking for fair cost recovery across the market. The standoff was resolved by April 2022: the two parties mutually agreed on new terms, and shipments resumed in time for Easter. Industry experts noted that such disputes, once rare in North America, were becoming more common as grocers flexed their muscles amid inflation. In this case, PepsiCo’s strong brands and consumers’ outcry (no one likes a chip shortage!) likely pushed Loblaw back to the table. The resolution suggests PepsiCo achieved a price increase (perhaps not the full ask, but enough) since it set a precedent that even the toughest retailer eventually had to accept some hikes. The lesson here is the importance of public perception and shopper loyalty – Loblaw risked customer frustration by running out of name-brand snacks, which can hurt a retailer’s traffic. Suppliers can leverage that leverage (tactfully) by highlighting how integral their brands are to a retailer’s assortment. However, the flip side is that PepsiCo had to tolerate lost sales for weeks, meaning such brinkmanship is costly. Ultimately, this “food fight” cooled down with a compromise, showing that even in markets where suppliers historically had less power, strong brands can successfully negotiate increases when armed with data and patience.

Best Practice Takeaways

• Quantify and Justify Everything: Come armed with data – show which products need an increase and why (cost drivers, consumer willingness to pay). Retailers are far more likely to accept rises that are evidence-based and targeted, rather than blanket hikes with vague explanations. Make value – not just cost – the center of your argument.

• Frame Price Hikes as a Joint Value Play: Shift the narrative from “help us cover costs” to “let’s grow category value”. Explain how the increase enables better service, innovation, or quality that benefits the category and the retailer’s margins. This collaborative approach turns a showdown into a partnership discussion.

• Highlight the Cost of Not Increasing: Clarify the consequences if no increase happens – e.g. smaller assortment, cut promotions, or compromised supply reliability. When retailers see that holding prices flat could hurt sales or profits in other ways, they often prefer a controlled increase over a hidden erosion of value.

• Be Creative and Flexible in Solutions: Successful negotiations often involve compromise and creativity. Consider phased increases, changes in pack size, adjusted trade terms, or temporary rebates if sales suffer. Offering conditional commitments – like guaranteed promo support or risk-sharing mechanisms – can provide the extra push needed to reach agreement.

• Prepare for Pushback (and Don’t Take it Personally): Retailers will push back – it’s their job. Anticipate their arguments (“competitors aren’t raising prices,” “we’ll lose shoppers”) and counter with facts (market data, consumer research, precedent of others raising). Equip your sales teams with a clear walk-away plan and escalation path so they negotiate confidently within set guardrails.

• Maintain Relationships and Trust: How you conduct the negotiation is as important as the outcome. Avoid scorched-earth tactics that can break long-term relationships (delisting wars can do lasting damage to brand equity and retailer trust). Instead, keep channels open, involve top management for tough talks, and show respect for the retailer’s position. A solution where both sides feel heard will stick; a brute-force “win” may not last. As one pricing expert noted, price increases must ultimately be a board-level, strategic initiative – treat it with that level of rigor and respect.

By following these best practices, FMCG suppliers can significantly improve their odds of moving the needle on price while preserving critical retailer partnerships. In an inflationary world, price increases may be unavoidable – but with a data-driven, collaborative approach, they can be successfully negotiated into reality. The experiences of recent years’ market battles show that while price talks are tougher than ever, the combination of preparation, flexibility, and understanding your counterpart is the key to success.