Deal’s aim is to drive forward brand clout and see off the cheaper me-toos
Branded product giants should be seen as allies, not threats, to retailers in the fight against commoditisation and deflation, Procter & Gamble’s UK boss has claimed.
Speaking to The Grocer after P&G stunned the trade with a £30bn deal to buy Gillette, Gianni Ciserani, the company’s vice-president and general manager for UK and Ireland, insisted that the deal was not about clawing back the initiative from retail giants such as Tesco and Wal-Mart or driving a harder bargain.
He said: “This is not about redressing the power struggle with retailers.
“It’s about coming to them with an even stronger proposition in personal care.”
The tie-up will create a global powerhouse of 21 different billion-dollar brands and gives P&G a 14% share of the UK market for cosmetics and toiletries combined, dwarfing Unilever’s 8.8% share [Euromonitor: 2003]. Ciserani said that while the hard discounters had not made much headway in the UK, they were a major threat on the continent and branded players had to respond by using their expertise to drive innovation in product development, merchandising, promotions and other activities.
In the UK, where brands were also being challenged by own-label products, the same principles applied, he said.
“We have to develop strong brands that connect with consumers, to stay ahead of the rest of the marketplace and to build partnerships with retailers.
He added:“It’s one plus one equals three.
“We are really strong on female products, Gillette is strong on male products - there will be all sorts of opportunities from being the category leader.”
Details of the structural implications of the tie up in the UK, where both companies are well established, are unlikely to emerge for several months as US and European regulators scrutinise the deal and shareholders decide whether to give it the green light.
Ciserani declined to comment on how many of the 6,000 job cuts P&G planned to implement globally would fall in the UK.
He said: “This is going to take six to nine months to complete, and then discussions will begin at a European level with our counterparts at Gillette over the location of all the manufacturing sites and the sequencing of events.”
A source at Gillette UK said that employees had been told to focus on the job in hand and that the message from management was “business as usual” until further notice.
Elaine Watson
Branded product giants should be seen as allies, not threats, to retailers in the fight against commoditisation and deflation, Procter & Gamble’s UK boss has claimed.
Speaking to The Grocer after P&G stunned the trade with a £30bn deal to buy Gillette, Gianni Ciserani, the company’s vice-president and general manager for UK and Ireland, insisted that the deal was not about clawing back the initiative from retail giants such as Tesco and Wal-Mart or driving a harder bargain.
He said: “This is not about redressing the power struggle with retailers.
“It’s about coming to them with an even stronger proposition in personal care.”
The tie-up will create a global powerhouse of 21 different billion-dollar brands and gives P&G a 14% share of the UK market for cosmetics and toiletries combined, dwarfing Unilever’s 8.8% share [Euromonitor: 2003]. Ciserani said that while the hard discounters had not made much headway in the UK, they were a major threat on the continent and branded players had to respond by using their expertise to drive innovation in product development, merchandising, promotions and other activities.
In the UK, where brands were also being challenged by own-label products, the same principles applied, he said.
“We have to develop strong brands that connect with consumers, to stay ahead of the rest of the marketplace and to build partnerships with retailers.
He added:“It’s one plus one equals three.
“We are really strong on female products, Gillette is strong on male products - there will be all sorts of opportunities from being the category leader.”
Details of the structural implications of the tie up in the UK, where both companies are well established, are unlikely to emerge for several months as US and European regulators scrutinise the deal and shareholders decide whether to give it the green light.
Ciserani declined to comment on how many of the 6,000 job cuts P&G planned to implement globally would fall in the UK.
He said: “This is going to take six to nine months to complete, and then discussions will begin at a European level with our counterparts at Gillette over the location of all the manufacturing sites and the sequencing of events.”
A source at Gillette UK said that employees had been told to focus on the job in hand and that the message from management was “business as usual” until further notice.
Elaine Watson
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