Albert Heijn tells suppliers to cut prices to help fund its expansion

Dutch supermarket group Albert Heijn has written to its suppliers telling them it expects a further 2% discount on bulk-buy purchases from later this month to help fund the company’s growth, the Financieele Dagblad reports on Tuesday.

‘As a supplier, you grow with us,’ the letter states. ‘To facilitate this growth, we think it is fitting that you make an appropriate contribution.’
‘This is just too crazy for words,’ one source told the paper. ‘You have no idea how many phone calls I have had from panicked suppliers. Family firms which deliver to Albert Heijn make a profit of between 1% and 2% and will become loss-making.
Powerful position
Legally, Albert Heijn probably has no leg to stand on, Amsterdam University law professor Edgar du Perron, told BNR radio. ‘But you can always have a go and see how the other side reacts. Albert Heijn would appear to have that much power.’
A spokesman for the supermarket group said mid-contract changes are necessary sometimes.
When this year’s discounts were agreed, Albert Heijn had not yet agreed to take over 78 C1000 supermarkets, the paper points out. In addition, it is reorganising its distribution centres and expanding in Germany and Belgium.
Albert Heijn is not the first supermarket group to try to change contracts mid-term. ‘We have recently had similar letters from Jumbo and Sligro,’ Philip den Ouden, director of wholesalers’ organisation FNLI is quoted as saying. ‘There must be an end to these attempts to change the rules.’
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