Big G Accused of Loading Orders

Discussion
Jan 27, 2004
George Anderson

By George Anderson


A former retail customer manager at General Mills, Jeffrey Millard, says the company regularly booked product as sold and delivered even before it was ordered, according to a
report in the Associated Press.


Mr. Millard contends General Mills regularly engaged in this practice called “loading” to help it meet its quarterly sales goals. He said that cereal was the category where “loading”
was practiced most often.


Mr. Millard, who was fired after 14 years with General Mills, has brought a wrongful termination suit against the consumer goods manufacturer in Arizona state court.


According to him. General Mills engaged in “the mother of all loads” when it was about to close its deal with Diageo PLC on Pillsbury. A higher stock price meant General Mills
would pay less for the acquisition.


The Securities and Exchange Commission began examining General Mills’ business practices and accounting procedures back in October.


Moderator’s Comment: Is loading a common business practice in the dealings between CPG companies and retailers? Is it an ethical business practice?


Loading almost always is a case of “paying Peter to pay Paul” and so many companies have done it at one point in time or another that most see it as a standard
solution to a common business challenge. We doubt many have questioned the business ethics of the practice.

George
Anderson – Moderator

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