>> making a profit from welching on deals is indefensible
Nothing grey about this
Grey market trading of grocery products by retailers and wholesalers has always been a murky business. And, for obvious reasons, it’s not well liked by the suppliers who see their products imported from Europe and traded here at much lower prices. My suggestion last April that the solution to grey market trading lay in the hands of suppliers drew an angry response from the British Brands Group, which accused me of being naïve for daring to suggest companies should get a firmer grip of their pricing structures across Europe.
Nine months on, my opinions of such grey market sourcing remain pretty much the same. In short, I believe that if it wasn’t worth their while, buyers wouldn’t do it. So the challenge for suppliers is managing their business in a way that ensures grey market sourcing is too much hassle to be worthwhile.
But in recent months, a number of suppliers have voiced their concerns about another strand to the grey market debate - one that appears to be growing; and one that I do have trouble defending.
In short, some say they are finding products sold to one of their big customers at a promotional price end up being sold to another retailer customer. And as you will have read in our reader panel survey in this week’s news section, for a sizeable minority of branded goods suppliers this is proving to be a major headache.
These suppliers offer all sorts of sound arguments as to why such activity should not be allowed to happen. But I believe it’s indefensible, simply because it is not an ethical way of doing business. I know some will find that argument wonderfully old-fashioned. But if you have negotiated a deal I don’t think it is old-fashioned, or naïve, to expect your customer to honour their side of the bargain. And that’s why this is different from the issues surrounding grey market trading.
Grey market trading has long been criticised for the way in which it often puts a strain on the relationship between supplier and buyer - particularly as it is sometimes used as a weapon of last resort when trading negotiations with a retailer get sticky. But those relationships must surely be strained almost to breaking point for those who find a big customer not only welching on a deal but profiting from that action too. Such activity has no place in an industry like ours.
Nothing grey about this
Nothing grey about this
Grey market trading of grocery products by retailers and wholesalers has always been a murky business. And, for obvious reasons, it’s not well liked by the suppliers who see their products imported from Europe and traded here at much lower prices. My suggestion last April that the solution to grey market trading lay in the hands of suppliers drew an angry response from the British Brands Group, which accused me of being naïve for daring to suggest companies should get a firmer grip of their pricing structures across Europe.
Nine months on, my opinions of such grey market sourcing remain pretty much the same. In short, I believe that if it wasn’t worth their while, buyers wouldn’t do it. So the challenge for suppliers is managing their business in a way that ensures grey market sourcing is too much hassle to be worthwhile.
But in recent months, a number of suppliers have voiced their concerns about another strand to the grey market debate - one that appears to be growing; and one that I do have trouble defending.
In short, some say they are finding products sold to one of their big customers at a promotional price end up being sold to another retailer customer. And as you will have read in our reader panel survey in this week’s news section, for a sizeable minority of branded goods suppliers this is proving to be a major headache.
These suppliers offer all sorts of sound arguments as to why such activity should not be allowed to happen. But I believe it’s indefensible, simply because it is not an ethical way of doing business. I know some will find that argument wonderfully old-fashioned. But if you have negotiated a deal I don’t think it is old-fashioned, or naïve, to expect your customer to honour their side of the bargain. And that’s why this is different from the issues surrounding grey market trading.
Grey market trading has long been criticised for the way in which it often puts a strain on the relationship between supplier and buyer - particularly as it is sometimes used as a weapon of last resort when trading negotiations with a retailer get sticky. But those relationships must surely be strained almost to breaking point for those who find a big customer not only welching on a deal but profiting from that action too. Such activity has no place in an industry like ours.
Nothing grey about this
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