Walmart Canada sent notices to 3,000 suppliers, including food suppliers, that they will face a new charge of 1.25 per cent beginning Sept. 14.
Suppliers worry that other supermarket chains will follow suit.
It’s far from the first time the giants in the business have introduced a new squeeze. Couple of years ago Sobeys and Loblaws announced they would discount invoices by a couple of percentage points, and made that change retroactive.
Another sign of their clout came when Sobeys, Loblaws and Metro all cancelled COVID-19 bonus pay on the same day. In testimony before a House of Commons committee, they admitted that as a “courtesy” they informed each other when they made that change.
Walmart called its new charge a “Vendor Investment Program,” an apparent reference4 to its announcement that it will be spending $3.5 billion in Canada.
“It sets a really, really unfortunate precedent,” said Michael Graydon, chief executive officer of Food & Consumer Products of Canada (FCPC), a trade group representing manufacturers.
“The practice in the past has been that the phone starts to ring, with other retailers saying we want the same deal,” Graydon said.
Too bad farmers couldn't do the same to hike their prices. Of course, supply management marketing boards can.
Too bad farmers couldn't do the same to hike their prices. Of course, supply management marketing boards can.
