Tesco looks to ease supplier backlash surrounding online fulfilment fee

Tesco is looking to ease supplier concerns over the ongoing row caused by its fulfilment fee proposals.

Chief product officer, Ashwin Prasad is said to have apologised for some of the ways the leading retailer dealt with the situation during a webinar earlier this week, The Grocer reported.

However, despite this, Tesco has not put a stop to its plans and according to new details, the cost to branded suppliers could be higher than originally expected.

While the Big 4 grocer initially looked to bill branded suppliers 12p per unit and 5p for own-label suppliers, it is understood that Prasad has said this will “start” from 12p.

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A source told The Grocer: “The fact is if you’re a brand selling products with a high unit cost you may not consider a 12p fee too onerous, but for people selling products at £1 per unit or less this could effectively wipe out profits.”

As Prasad said this was a “voluntary scheme” with “no consequences”, the source added, “they now need to stand by that because the original letter threatened to downsize people’s businesses”.

The fulfilment fee proposals were first outlined to suppliers in a letter last month, which said there would be “additional fulfilment charges” for products sold through its online platform and via its Booker wholesale channel.

Tesco said at the time that any supplier who didn’t comply with the new fees could face the threat of range reviews or reduced prices.

However following backlash, the supermarket promised Groceries Code Adjudicator (GCA) Mark White that suppliers will not be de-listed if they refuse the new ‘fulfilment fee’ system.



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