Bully retailer forced to scrap evidence
After paying a firm to assess the relationship it had with its suppliers, a major food retailer has ditched the resulting report because the feedback from manufacturers turned out to be so negative.
"Retailers are so price focused, they end up in confrontations to reduce the cost of product relationships with suppliers," said Leo Martin, director of GoodCorporation, which helps companies to systematically assess their business practices.
He was hired by a supermarket to interview 50 of its suppliers so that the firm could defend itself in the Competition Commission inquiry into the groceries market. But the responses were so poor, that the retailer was unable to use the information to its advantage, Martin said.
"There were fairness complaints raised over paying people on time. Some suppliers were so angry, I had to hold the phone away from my ear!"
His comments follow a recent admission by the Competition Commission that attempts to rein in supermarket buyers in recent years had failed miserably, with retrospective price reductions, fines, demands for upfront payments and payment problems and delays still rife in the trade.
The Office of Fair Trading referred the UK groceries market to the Competition Commission for investigation in May 2006. The Commission's provisional findings will be revealed in September and the final report is expected to be published in February 2008.
