rh1
Honorary Master
The food industry is basically bullied by the big supermarket chains.The rebates and allowances account for things like swell allowances, DC storage costs, staff packing your stuff on shelf, advertising (minimal advertising), its quite a massive cost sadly.
They basically bought from us every month (this was both Dis-Chem & Clicks) and then you get a bill with your rebate and allowances and it would be deducted from your payment.
Whenever Dis-Chem or Clicks open a new store you pay about R2200 so Dis-Chem basically fund their own new store openings from suppliers money. I sold to Shoprite/Checkers/PNP, Spar they all have it, the supplier pays for everything so in the end you have to hike up your price to accommodate these fees. These percentages also increase most years as well so the increase would be inflation + an extra fee to cover added operational costs.
The biggest BS i saw was PNP rearranging their stores and you getting a bill for each store where your product was moved... Sometimes it moved 10cm and you get a R1500 bill PER STORE
Smaller new entrants cannot crack the market, due to all the charges they have to pay.