Polish Branch of Tesco Pressures Producers

POLAND - The local branch of UK spuermarket giant, Tesco, is demanding price reduction from local suppliers.
calendar icon 7 November 2008
clock icon 2 minute read

The Polish branch of British Tesco is trying to force suppliers to substantially lower prices of products, according to Warsaw Business Journal.

"Due to the deepening financial crisis, dropping prices of materials (milk, grain, oil, vegetable and fruit), increased price aggressiveness of discount stores (Lidl, Biedronka), and our willingness to provide competitive offers to our customers, we are forced to lower purchasing prices and improve commercial terms in 2009," said a letter sent by Tesco to a poultry company.

The president of this company, who wanted to remain anonymous, revealed that contents of the document demanded present prices to be lowered by 5-20 percent. "This is impossible. With profitability close to zero in our sector, no discounts can be offered. We have no way of lowering prices," said the CEO.

Representatives of other companies admit having received such demands but they all declare they are not willing to step back.

"As every year in this period, we conduct negotiations concerning terms of cooperation with our suppliers. We want the best possible cooperation with our suppliers," said Michal Kubajek of the Tesco Polska press office.

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