The latest memo also removed some other languages, and relaxed pricing conditions for suppliers. The previous guidelines in 2014 were only aimed at their drug, health and welfare providers. Loblawe`s latest memo indicates that an advertising dispute is a situation in which the grocer expects suppliers to keep it “profit-neutral” (sp.: Pay the cost difference) if the seller`s item is promoted with a discount in a rival`s flyer, but on the front page of Loblawes Flyer, it is rated at a higher price, which encourages Loblaw to match the prices. The Competition Bureau`s Loblaw investigation, which obtained confidential information from 12 suppliers, including General Mills Canada Corp. and S.C. Johnson-Son Ltd. comes after the office that gave the go-ahead for Loblawe`s acquisition of Shoppers in March. It limited Loblaw`s business with shopper suppliers to avoid pressure from sellers and rivals, while saying it would continue to monitor the grocer. For example, if Loblaw is to match the value of a Costco coupon and reduce its retail price “We expect the seller to provide coverage on the coupon value for all coupon validity dates.” “Suppliers are getting tired of it,” says Marion Chan, director of TrendSpotter Consulting, which advises suppliers on new products. “There has to be something.” She said that some suppliers had told her that they could no longer afford to launch new items on the big chains, because the fees are high just to get on the shelves of the big retailers. Loblaw requires a supplier to pay financial compensation in the form of some kind of margin protection agreement if the grocer compares prices in a competitor`s flyer. An advertising match at its discount stores, such as The Real Canadian Superstores in Western Canada, includes Loblaw match prices from those marked in a competitor`s flyer, which degrades in Loblaw`s profit margins, the latest memo says. “To ensure we reach the necessary margins, we expect us to negotiate an Ad Match agreement with each supplier.
This deduction is automatically deducted and a summary is transferred to the creditor. Loblawe`s latest memorandum on supplier policy entitled 2014/2015 Loblaw Category Policies is similar to the previous one with a focus on the Costco Wholesale Archirival. Loblawe`s policy is to offer customers the same break as Costco with its coupons, says the latest memo. And it will charge its sellers the difference in cost for a discount that Loblaw takes on a product as a result of the Markdown Costcos Coupon adjustment, it is said. Industry groups such as cfIG and Food and Consumer Products of Canada (FCPC), which represent many suppliers, have called on Ottawa to implement a food code of conduct, for example. B in the UK and Australia to regulate the relationship between retailers and suppliers. Federal Economy Minister James Moore is looking into the issue, a spokesman said. Some practices waved red flags to the competition bureau, which last month stepped up its investigation into loblaw stores with its suppliers. After the sobey price freeze letter last year, other retailers subsequently made similar requests to their suppliers.
Major suppliers, including Kraft, Nestlé and Coca-Cola, have resisted by threatening to withdraw flyers and other advertising payments and even suspending product deliveries if retailers do not impose a “minimum price” to prevent their products from being used as loss-making leaders and damaging their brand image, according to industry documents.