Wal-Mart follows Carrefour on raising fees

09:18, January 27, 2011      

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Following Carrefour's move, Wal-Mart also raised the slotting allowances and other types of fees charged at products' suppliers, according to the China Business News Tuesday.

Besides, the retail giant at the same time, increased the percentage of point deduction, which ranges from 10 to 20 percent, outraging many suppliers.

Wal-Mart is known for its low purchasing and selling prices, but since other retailers have also been able to merchandise at competitive factory prices, the company's profits were closing the red.

When interviewed by the China Business News, an official from the retail giant denied having increased charges on suppliers.

Recent disputes involving retailers and suppliers have caught the attention of customers and industry insiders. However actually, suppliers' right to speak on prices and bargaining power determine the destinies of both sides.

Famous brands like Coca Cola and P&G and brands with large market coverage are exempt of slotting allowances, while relatively unknown ones cannot escape the duties, said Ding.

With more market coverage and less dependence on retailers, brands like Kraft have more right to speak on prices.

Source: Global Times
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