UK: Supermarket anger at Diageo GB trade terms
Customers of Diageo Great Britain are annoyed at a new standard set of trade terms, announced by the drinks group this week, just-drinks understands.
Some multiple retailers were "spitting mad" at the timing of the new terms, one analyst close to the situation told just-drinks today (5 September).
He said some customers had been dismayed to learn of the announcement via the trade press, rather than directly from Diageo Great Britain. There was also concern that the implementation of the terms, rolled out from this month, may disrupt the oncoming Christmas trading period.
Diageo Great Britain announced earlier this week that it had introduced a new standard set of terms for its trade customers, including a price list, in order to drive spirits sector growth. It said the new terms "required all customers to deliver a variety of proven sales drivers".
Sales director David Smith added: "We believe there is a potential GBP500m (US$892m) of incremental value for the industry by concentrating on key development areas."
The analyst speaking to just-drinks today said Diageo GB appeared to have "underestimated how sensitive customers are to this issue".
But, he added, the terms could be a neat solution for Diageo in the longer term. Other companies would be "watching closely" to see if the terms worked, with a view to adopting a similar approach, he said.
A spokesperson for Diageo GB was not immediately available for comment this afternoon.
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