Canadian grocery suppliers strike back against heavy discounting
Source: The Globe and Mail
As grocers slash prices to win bargain-hungry customers, makers of food and consumer goods are pushing back against heavy discounting of their products. ... Now vendors are retaliating by setting minimum advertised prices in a bid to stop retailers from using their merchandise as loss leaders.
... Over the past several months, major suppliers of items ranging from Coke to Delissio pizza, Folgers coffee and Chef Boyardee spaghetti have told grocers they will pull funding for flyers and other promotions for the products – and in some cases potentially suspend or limit product shipments – unless the retailer agrees to the new pricing policy, according to documents obtained by The Globe and Mail.
... Minimum advertised prices were banned in Canada until 2009, when amendments to the Competition Act decriminalized “price maintenance,” opening the door to the policy, which is common in the United States.
... “We are investing millions of dollars in building our brands,” Smucker’s Mr. Kouri said. “To have them sold at prices sometimes that are well below our strategies and leave consumers wondering about our brands makes us feel vulnerable. It’s a difficult situation.”
Read more: http://www.theglobeandmail.com/report-on-business/canadian-grocery-suppliers-strike-back-against-heavy-discounting/article17360748/
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