Reports that Asda has demanded up-front cash payments from suppliers, including Masterfoods and Unilever, during current discussions are misleading, the UK unit of Wal-Mart told just-food today (30 March).
The Financial Times reported that the supermarket retailer has been holding talks with the suppliers to secure up-front fees of up to 25% of annual business to help fund GBP360m (US$626.9m) price cuts promised by chief executive Andy Bond.
But the company said it took investors through its ‘Buy For Less’ programme on Tuesday, and insists it is business as usual at the Wal-Mart owned UK chain.
Asda spokesperson Dominic Burch told just-food: “This is not about asking our suppliers for a one-off payment of cash. We are sitting down with our key multi-national suppliers and agreeing joint future growth plans – as we do from time to time.
“As ever though we remain true to our principles – tough negotiators on behalf of our customers, but fair to our suppliers. We always want to ensure the benefits of the growth our suppliers have seen over the past seven years is fairly shared between us, our suppliers and most importantly our customers.”
According to the newspaper report suppliers would want preferential treatment over other brands, including prominent marketing displays, in return for such a payment.
Both Masterfoods UK and Unilever did not want to make any comment on the issue when contacted by just-food.