Beyers Chocolates’ liquidation follows exclusivity dispute, 700 jobs lost

SOUTH AFRICA – Former Woolworths supplier Beyers Chocolates has filed for liquidation following a contract dispute over an exclusivity agreement that constituted 50% of the chocolate manufacturer’s annual turnover, resulting in 700 job losses.

The 34-year partnership began in 1990. According to founder Kees Beyers, Woolworths accounted for approximately half of the company’s total revenue, creating significant client concentration risk.

Industry standards typically advise that no single customer should account for more than 30% of turnover to maintain operational resilience.

However, between 2018 and 2023, Woolworths more than doubled its business with Beyers, deepening the supplier’s dependency.

The dispute arose when Woolworths introduced seven competing chocolate brands onto its shelves, gradually eroding Beyers’ exclusive position.

Therefore, Beyers subsequently acquired a separate manufacturing facility to supply other retailers, including Checkers and Pick n Pay, while maintaining Woolworths-exclusive production at its original plant.

However, Woolworths terminated the agreement, citing that “products materially similar to Woolworths-exclusive offerings were being supplied to competitors,” which the retailer argued violated the exclusivity contract’s intent.

By January 2025, Woolworths had transitioned its chocolate supply to alternative manufacturers. The retailer stated it “cannot be responsible for the actions of a business that it has been separated from for over a year.” Beyers contested that product formulations for other retailers were materially different.

The liquidation process has commenced, with Beyers Chocolates confirming that all 700 employees have been dismissed. Company assets, including the two production facilities and specialized chocolate manufacturing equipment, will be sold to settle outstanding debts to creditors.

No buyer has emerged to acquire the business as a going concern, despite efforts to secure a rescue partner. The liquidation has also brought long-standing supplier relationships with Checkers and Pick n Pay to an end, as those contracts were dependent on the now-closed second factory.

Woolworths maintains it acted fairly to protect “proprietary product development, brand differentiation, and long-term commercial interests.”

Nevertheless, Beyers’ liquidation demonstrates that suppliers should audit client portfolios, negotiate diversified terms, and establish contractual safeguards before dependency becomes irreversible.

Therefore, the lesson here could be that when a retailer demands exclusivity, suppliers should ask for guaranteed minimum orders. Without such protection, they could end up like Beyers.

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