Premier Foods “pay-to-stay” policy

Laura Kuenssberg report on BBC Newsnight 5/12/2014 on Premier Foods asking suppliers for payments to stay as listed vendors. In retailing there is an argument for payments to be listed as a supplier because of shared marketing costs, but the practice is harder to justify in general supply relationships. Premier’s policy is an element in defining preferred auppliers, but you can see why suppliers find the practice coercive. This is a clear example of how the arguments for closer supply-chain integration do not necessarily lead to the “win-win”, mutually beneficial, inter-organisational love-in implied by the textbook.