Mars to scrap Orkla’s Wrigley contract in Norway
The company will take over Extra and Hubba Bubba sales from January 1, 2018.
It cited its merger between Mars and Wrigley as the main reason.
Orkla and its Nidar business have handled Wrigley product distribution in Norway since 1988.
Driven by Mars and Wrigley merger
Jeanette Hauan Fladby, CEO of Orkla Confectionery & Snacks Norge, said: "This distribution agreement has been important because it has given us access to the chewing gum market, and the possibility of being a full-range supplier in the confectionery category.
"However, we've been aware that Mars and Wrigley merged their organizations last year and that this could affect our agreement," she said.
Mars Incorporated acquired the minority stake held in Wrigley by Warren Buffett-owned Berkshire Hathaway in October last year and said it would combine its chocolate and Wrigley segments to create ‘Mars Wrigley Confectionery’. The Mars Wrigley integration will be phased in during 2017.
Hauan Fladby said Orkla had increased its Norwegian gum market share from 18% to 86% since it began the Wrigley partnership in 1988.
"We will now spend the next few weeks looking at what this means in detail for Orkla Confectionery & Snacks Norge and how we can best deal with the change,” she said.
The company plans to explore new opportunities that open up after it exits the agreement.
Orkla’s brands and sales growth
Orkla Confectionery & Snacks makes up around for 17% of Orkla group revenues and includes brands such as KiMs, Nidar, Göteborgs Kex and Panda, and has around 3,000 employees.
Around 94% of the division’s sales come in Nordic and Baltic markets with Norway the largest single market.
The business unit posted NOK 6.2bn ($726m) in 2016 revenues, representing 4.9% organic growth.
Last year it became PepsiCo snack brand Lay’s distributor in Norway, Sweden and Finland.
