FD Buyer: Dehaize America Plans ‘Preferred Broker Network’
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Dairy Buyer magazine.
Does Delhaize America’s plan to establish a “preferred broker network” as of Jan. 1 break the law? Would it set a harmful precedent for the industry?
I’m no lawyer, but the concept seems flawed to me. If you missed the initial salvo, go to fdbuyer.com and key in “Delhaize” in the little search box in the upper right. In a nutshell, Delhaize wants to allow only “preferred” brokers (on a list it created) to meet directly with its category managers.
Advantage Sales & Marketing didn’t make the preferred list, which got the attention of many in the industry since it is such a large and established brokerage.
Nobody’s saying much for the record, but I’ve heard that Advantage may sue, or may even consider acquiring or making an arrangement with one of the preferred brokers.
Here’s part of Delhaize’s memo to brokers and vendors, sent out in late October:
“These preferred brokers will be available to all Delhaize America vendors, offering solutions and services across categories, including center store, fresh and specialty products. Brokers in the preferred network will have regular access to our Category Management teams, helping ensure timely responses and optimum solutions.
“Effective immediately, vendors may begin to move to brokers in the preferred network. We expect this process will be substantially completed by the end of the year, and ask our current brokers, vendors and manufacturers to help us ensure a smooth transition. With the start of 2012, Delhaize America category managers will be interacting only with brokers within the Preferred Broker Network.”
Both vendors and brokers have called me with their own stories and concerns. This situation seems to be changing daily, and I’ll try to keep you up to date on our news section at our website.
Mark Baum, president and CEO of the Association of Sales & Marketing Companies in Washington, says, “Delhaize appears to be attempting to reduce its cost of goods sold for its Food Lion and Hannaford stores and other banners by forcing their suppliers by January 1, 2012 to either deal directly with Delhaize and presumably pass on a discount in lieu of brokerage commission or requiring such manufacturers to use a list of preferred brokers, who in turn appear to have been requested to make or pass on an additional investment in Delhaize.”
- ‘Preferred’ Brokers – Frozen & Dairy Buyer
- New Letters from Delhaize About ‘Preferred Brokers’ – Frozen & Dairy Buyer
Discussion questions: What do you think about the Delhaize “Preferred Brokers Network” proposal? What appear to be the pros and cons of such a move for Delhaize? What repercussions may such arrangements have on vendors and brokers?