John Wood
Any manufacturer trying to phase out overrider payments can expect stiff resistance from wholesalers. A panel of top executives from across the wholesale sector have unanimously backed the use of overriders in a survey carried out by The Grocer.
Every member of the panel said overriders were crucial to the profitability of their business.
One said: "In many cases they [overriders] account for the net profit of the business. It is a common practice to be just working on the overrider element."
Although GTA, which negotiated overrider payments on behalf of Landmark Cash & Carry and Spar, has just been closed, our panel dismissed the idea this might indicate overriders themselves were on the way out. While some accepted the companies' explanation that GTA closed because of the diverging needs of the two organisations, several suggested closure was driven by cost considerations.
One said: "GTA was another level of cost. The resource to negotiate overriders was already in place in both organisations."
Panel members were also unanimous in the belief that overriders must be retained although several said their use should grow more sophisticated.
"Overriders in their old form ­ the blunt instrument of volume ­ will fade away," said one senior industry figure."However new discount structures will take their place, rewarding such factors as size, growth, logistical and administrative efficiencies and business strategy support. We welcome these developments."
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