The Tesco debacle has really brought supplier treatment to the top of the agenda. Me, I’ve always helped suppliers learn how to deal with it in a savvy yet strategically sound way rather than grumble. If you want to play where the big rewards are then learn how to do it and don’t moan if you get it wrong and get burnt. I do believe, though, that supplier treatment and subsequent payments falls into three distinct buckets. Bucket one is ‘good business,’ for example listing fees and promotional gate fees. The supplier negotiates these to a level where they know it will pay out. Bucket two is ‘that caught me out,’ for example annual admin fees, store opening support. Here some suppliers lose focus on the money, saying “it’s the cost of doing business.” Bucket three is ‘just wrong.’ This covers threatening withdrawal after creating supplier expense and deducting spurious payments from the ledger. This is where the advantage should be outlawed.
So again we have heard the GCA calling for supplier evidence. Not persuaded? Neither would I be. The media can’t find anyone to talk on the record except those who are out of business and have no intention of going back in. Suppliers won’t speak to the media for the same reason they won’t speak to the GCA.
The compliance officers in the retailers genuinely can help in the short term, but they count getting an invoice paid as a win. They should look instead at what happens to the supplier at the next range review. Buyers can kill you and make it look like an accident.
At EC level it’s known there are unfair trading practices, but the debate about consumer benefits leads to inaction. Instead they prefer the approach of defining what good collaboration looks like and encouraging that to everyone. Hilarious! We all know that already. They are listening to too many presentations in joint retailer forums saying it’s not a problem. It’s large suppliers with established cash cows whose opinions come through. These are not the ones struggling or going out of business. Large suppliers can keep it how it is, knowing it raises the barriers to entry. And so it continues.
Let’s see if the new Tesco revamped code of business conduct will really make a difference.