Update: 12 May
The collapse of one of South Africa’s best-known chocolate manufacturers has sparked a growing public debate around supplier relationships, intellectual property and the pressures facing local businesses in an increasingly competitive retail market.
In recent days, the liquidation of Beyers Chocolates, the company behind popular products like Chuckles and Sweetie Pie, has dominated conversation across business circles and social media platforms, with many South Africans expressing concern about the future of local manufacturing and the potential impact on hundreds of workers.
BusinessTech previously highlighted claims by Beyers Chocolates founder Kees Beyers that the company’s longstanding relationship with Woolworths played a significant role in the chocolatier’s downfall.
But Woolworths CEO Roy Bagattini has now publicly disputed those allegations, saying the retailer cannot be held responsible for decisions made by a business it parted ways with more than a year ago.
The dispute follows the liquidation of Beyers Chocolates after nearly four decades in operation, a development expected to affect around 700 employees linked to the company’s manufacturing operations.
‘It’s our brand’
Speaking during an interview with RSG/Moneyweb Radio, Bagattini said Woolworths initially chose not to engage publicly on the matter, but felt compelled to respond after the retailer’s ethics and credibility were questioned in media interviews and online discussions.
‘It’s our brand, and we take it very seriously when our credibility and certainly our ethics are called into question,’ Bagattini stated.
At the centre of the fallout is the breakdown of an exclusivity agreement between Woolworths and Beyers Chocolates, a partnership that had spanned more than 30 years.
Beyers previously told 702 that losing Woolworths, which reportedly accounted for roughly half of the chocolatier’s turnover, placed unsustainable pressure on the company’s finances.
‘They pulled the plug on us, and the pressure of the debt just became too much,’ Beyers said.
Bagattini, however, rejected suggestions that the matter amounted to a ‘David versus Goliath’ scenario involving a powerful retailer overwhelming a smaller supplier.
Instead, he argued the dispute stemmed from concerns around intellectual property linked to chocolate products jointly developed over several years.
According to Bagattini, Woolworths discovered in 2023 that Beyers was allegedly supplying similar products to competing retailers while using formulations and concepts developed through the partnership.
‘Our team found out that he was supplying our direct competitors with products using and leveraging our Intellectual Property,’ he said.
He added that Woolworths had spent years attempting to resolve the dispute before eventually terminating the arrangement.
‘We’ve engaged with Beyers extensively over a two-year period to try and remedy the situation, but we weren’t able to come to terms on it,’ Bagattini explained.
The Woolworths chief executive stressed that the retailer did not object to Beyers supplying competitors in principle, but maintained that products developed collaboratively with Woolworths could not be replicated elsewhere.
Bagattini also pushed back against suggestions that Woolworths’ own branded chocolate ranges had weakened Beyers’ business.
‘That’s not really correct. Up until the years preceding us concluding our arrangement with him, we literally doubled his business,’ he said.
According to Bagattini, Woolworths had significantly expanded Beyers’ production volumes over the years and had intended to allocate further manufacturing opportunities before the relationship deteriorated.
South African chocolatier Beyers Chocolates was forced to recall millions of rands’ worth of Easter eggs from Shoprite stores shortly before entering liquidation, Cape {town} Etc reports.
According to News24, the recall – valued at around R30 million – involved private-label chocolate mallow eggs sold across Shoprite, Checkers and Usave between January and March, after customers raised concerns about product quality.
Quality issue sparks large-scale recall
Shoprite confirmed that the recall was initiated by Beyers following complaints linked to a manufacturing defect.
‘The decision to recall the affected batches was taken by the supplier due to poor product quality because of a manufacturing defect, with products to the value of approximately R30 million affected,’ the publication quoted Shoprite as saying.
Beyers, however, has placed the figure closer to R20 million, attributing the issue to ‘an issue with a raw material that we used’.
Recall not linked to collapse, says CEO
Despite the scale of the recall, Beyers founder and CEO, Kees Beyers, has pushed back against suggestions that it contributed to the company’s downfall.
He told News24 that the financial impact of the recall was relatively minor compared to the loss of its major retail contract with Woolworths – a development that had already placed significant strain on the business.
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Fallout with Woolworths looms larger
As previously reported by Cape {town} Etc, Beyers’ collapse followed the breakdown of a decades-long relationship with Woolworths, which had been central to the company’s operations for over 30 years.
The partnership unravelled amid disputes over supply arrangements and exclusivity, ultimately leading to a sharp reduction in orders and mounting financial pressure.
According to News24, Beyers estimates that the loss of the Woolworths contract resulted in around R320 million in annual revenue, far outweighing the cost of the Easter egg recall.
A final chapter for a local confectionery brand
Founded nearly four decades ago, Beyers Chocolates had built a strong footprint across South Africa’s major sector, supplying a range of confectionery products, including its well-known Chuckles and Sweetie Pie lines, to multiple major chains.
Its Sweetie Pie mallow eggs were widely stocked across retailers, excluding Woolworths, making the recall particularly significant given its timing ahead of the company’s liquidation.
While the recall marked one of the company’s final operational setbacks, it is the loss of key retail partnerships that appears to have delivered the decisive blow, closing the chapter on one of South Africa’s longstanding chocolate manufacturers.
Meanwhile, since the split, Woolworths has reportedly expanded its chocolate offerings, including products from global brands like Lindt, while scaling back locally produced lines.
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Picture: Jessica Loaiza / Unsplash
