The Forum of Private Business (FPB) has criticised Asda following rumours that the UK’s second largest retailer has asked suppliers for upfront payments, however, Asda told just-food that it is not attempting to force one-off cash charges on independent suppliers.
The FPB said that it was concerned that such a move could lead to exclusionary measures. Chief executive Nick Goulding said today (3 April): “In an attempt to keep its standing in the marketplace, Asda has yet again come down hardest on the independent retailers. The idea of such a large organisation firstly cutting the prices that it buys from suppliers and secondly asking for cash upfront is madness.”
The FPB, which represents small to mid-sized suppliers, said Asda’s renegotiation of supplier contracts was placing undue pressure on food producers, coming on top of a price war between the UK’s ‘big four’ supermarkets.
“This is yet another brazen attempt by the big four supermarkets to flex their financial muscle and wring even more money out of independent suppliers,” Goulding continued in a damning statement. “This issue of squeezing every last drop out of the contractor was highlighted in a survey by The Grocer, which showed that small shop owners are able to buy goods from supermarkets cheaper than from wholesalers.”
Jenifer England, a spokesperson for the UK unit of Wal-Mart, told just-food: “We always aim to get the best deal for consumers – there’s nothing wrong with competition between suppliers. We have a well-deserved reputation for being tough negotiators on behalf of our customers, but fair to suppliers and offering them major opportunities to grow.”
However, England said it was not Asda’s aim to put the squeeze on suppliers: “This is not about asking suppliers for a one-off payment of cash – our “buy for less” programme is about negotiating and then agreeing updated business plans with our multinational suppliers based on our growth – plans that give our customers the best prices.”