Bakers squeezed by supermarkets

The entertainment industry isn't the only pit of payola and corruption — witness this testimony from a rep from the Independent Bakers Association on the practice of "slotting fees" — bribes that supermarkets demand from manufacturers who want their products carried in a way that is likely to generate sales.

* A New England supermarket chain was purchased approximately five years ago by an individual who used the proceeds of slotting fees to cover a portion of the equity for the purchase. A "pay or stay" slotting fee was required for each item in the supermarket.

* A New York area supermarket chain regularly charges $20,000.00 for each new item introduced by a food manufacturer, as well as "requesting" annual contributions to the purchasing manager's Christmas party.

* A West Coast supermarket chain was solicited and paid a one million dollar fee to change from one food manufacturer's products to another's. The justification was cost of computer reprogramming.



(via Peterme)