Beiersdorf consolidates Swiss distribution

By Simon Pitman

- Last updated on GMT

Related tags: Beiersdorf, Care giant beiersdorf, Europe

Global personal care giant Beiersdorf says it will completely take
over its Swiss distribution business by buying up the 50 per cent
outstanding share in the business.

Beiersdorf will acquire the remaining stake in Swiss Beiersdorf, Münchenstein, from the Doetsch Grether Group, ensuring that the company has a 100 per cent controlling stake in business. The transaction will be approved once all regulatory controls have been met. The Swiss business was originally founded as a 50/50 joint venture in 1977, and has been successfully used as a platform to distribute the Nivea, Eucerin and Labello brands throughout the country. The move to consolidate the distribution business is part of Beiersdorf's aims to increase its market share in a country with one of the world's largest per capita spending rates in the world. In 2006 the country had a per capita GDP of $38,706 (€26,100), according to the International Monetary Fund, which ranked it as the 6th​ highest in the world. In line with these figures, Beiersdorf says that Swiss consumers spend an average of €20 per head on Nivea products every year, the highest spend rate in the whole of Europe, which compares favourably to second placed Austrian consumers, who spend an average of €13 per head. Beiersdorf had been concentrating on consolidating its European production and supply chain facilities in recent years in an effort to increase margins and profitability in the face of strong competition in relatively saturated markets. This has led to several factory closures throughout Europe, with manufacturing being consolidated into larger, more efficient facilities. As a result, production costs have been cut in Europe, ensuring a healthy rise in operating income for the first nine months of this year, up from €102m last year, to €152m this year. Also in Europe, the company is expecting further growth to come from the continued development of Nivea Hair Care, which launched in France in September and released its Straight and Easy range in 20 European countries in July. The most recent quarterly results, ending in September, showed that the company's European sales rose 3.2 per cent to €882m aided by strong double-digit growth in Eastern European and Mediterranean countries.

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