Stores quiz on ‘pay to stay scam’
SUPERMARKETS are claimed to be demanding millions from suppliers in “pay to stay” scams to keep their products on shelves.
Other alleged abuses include chains deliberately overestimating orders for promotions – leaving suppliers with huge amounts of overpriced stock.
Companies now face a major probe over claims they breached industry rules to maximise profits.
Groceries code adjudicator Christine Tacon has received a string of complaints about “pay to stay” and over- ordering, which is known as “forecasting”.
Breach
She said: “Pay to stay is a breach of the code – what I’ve got to decide if it’s part of new negotiations or midagreement. Retailers can ask people to pay for a new product listing but they can’t for an existing product.
She added: “Retailers have to compensate for inaccurate forecasting.”
One supplier told Ms Tacon it was asked to pay £25,000 for a charity ball table. She said: “Retailers were allowing a third party to run it [who] were being quite threatening in trying to get people to go.”
The British Retail Consortium, which speaks for supermarkets, said: “It would be counter productive for retailers to damage their relationship with suppliers.”