Price rises bringing out worst in some suppliers

Wholesalers’ cost prices are going up at the fastest rate and greatest volume in decades, and many suppliers are damaging the wholesale sector with the way they are trying to impose increases, and their lack of support. This was the warning from two wholesale conferences in the last month, which called on more suppliers to work in partnership with the sector.

Speaking after the IGD Wholesale Conference, Martin Williams, managing director of Landmark Wholesale, told ProWholesaler he could not remember a time when there had been so many price increases, or such large increases.

Earlier he told delegates that one company was attempting to impose a price increase on a KVI branded product, but the increase was only for wholesalers and not the major supermarket groups. He said Landmark was looking at referring the case to the Competition Commission’s inquiry into the grocery sector because this was direct evidence of the preferential rates the supermarket groups were obtaining.

At the Country Range Group’s Annual Conference, foodservice trading controller Troy McKee told delegates: “This year has seen an unprecedented amount of price increases with too many suppliers reneging on agreements to force them through.”

Williams said other problems with suppliers included: major service level problems for wholesalers with a manufacturer, but supermarkets were not affected; a minimum drop being doubled with six days notice; and a supplier which moved its finance department to eastern Europe and ignored repeated request for payment, and Landmark had to send in bailiffs to its UK offices.

Williams said that with such tough market conditions it was essential that wholesalers and suppliers collaborated so they could focus on their business rather than wasting time sorting out problems.

As an example of good practice where suppliers were involved and all elements of the trade were benefiting, Williams cited Landmark’s Hot House programme.

But he also emphasised that most other wholesalers had retail clubs or symbol groups where suppliers could benefit from partnerships.

l See page 29

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