Irish grocers’ organisation RGDATA has stepped up its battle with Vodafone over a cut in electronic top-up margins (The Grocer, July 10, p10) by warning the mobile phone giant that many members will refuse to stock its cards.
RGDATA’s new director general, Tara Buckley, has told the company by letter: “In the unsolicited feedback that we have received from individual members directly, it seems clear that the majority have decided to respond to Vodafone by cancelling their arrangements for stocking your products.”
The margin cut is the second imposed by Vodafone in two years and takes effect from August 1. It reduces the shops’ margin on top-ups worth E10-E15 from 6.5% to 5.5%, while the margin on E20, E25 and E40 top-ups will fall from 10% to 5.5%.
The reduction has caused widespread resentment, coming in the wake of a company profit of E328m on its Irish operations. In her letter, Buckley told local Vodafone boss Paul Donovan: “You have underestimated the anger among retailers. It is now a matter for retailers to take into their own hands.”
RGDATA has around 4,000 members and Buckley said she felt Vodafone would lose “a considerable number” of agents as a result of the cut.
In response, a company spokesperson said it had no control over the margins wholesale distributors offered on top-ups “as it does not have a relationship with retailers”.
The company, according to the spokesperson, pays over E30m annually in commission on e-top-ups, and the commission level is higher in Ireland than in Britain.
The company felt the sale of the cards “is not a significant burden for retailers,” she said, and added: “There are no stock storage or ordering issues.”
RGDATA’s new director general, Tara Buckley, has told the company by letter: “In the unsolicited feedback that we have received from individual members directly, it seems clear that the majority have decided to respond to Vodafone by cancelling their arrangements for stocking your products.”
The margin cut is the second imposed by Vodafone in two years and takes effect from August 1. It reduces the shops’ margin on top-ups worth E10-E15 from 6.5% to 5.5%, while the margin on E20, E25 and E40 top-ups will fall from 10% to 5.5%.
The reduction has caused widespread resentment, coming in the wake of a company profit of E328m on its Irish operations. In her letter, Buckley told local Vodafone boss Paul Donovan: “You have underestimated the anger among retailers. It is now a matter for retailers to take into their own hands.”
RGDATA has around 4,000 members and Buckley said she felt Vodafone would lose “a considerable number” of agents as a result of the cut.
In response, a company spokesperson said it had no control over the margins wholesale distributors offered on top-ups “as it does not have a relationship with retailers”.
The company, according to the spokesperson, pays over E30m annually in commission on e-top-ups, and the commission level is higher in Ireland than in Britain.
The company felt the sale of the cards “is not a significant burden for retailers,” she said, and added: “There are no stock storage or ordering issues.”
No comments yet