Majestic asks suppliers to 'support' new warehouse with discounts

By Gemma McKenna

Published: 30 October, 2014

Majestic has asked some of its suppliers to contribute a 4p per bottle retrospective payment to help fund its new warehouse in Hemel Hempstead, Harpers understands.

The move comes as retailers are under increasing scrutiny over how they treat suppliers following Tesco's £263 million profit overstatement, which is linked to how supplier payments are accounted for.

Majestic Majestic has just built a new warehouse in Hemel HempsteadThe retailer is asking its suppliers to 'support' the centre, which it says will 'benefit all our business partners'.

Harpers.co.uk has been in contact with a number of suppliers, none of whom wanted to speak openly, but said the request was a "shock" and "come out the blue".

One supplier said: "It is tantamount to blackmail. When you have already negotiated the agreement for the year it is not our responsibility to pay for this new warehouse. To think that suppliers should pick up the tab for this smacks of incompetence."

Harpers understands discounts are requested on all bottles sold between the end of October and the end of April 2015, at which point it will come up for review.

The retailer is asking its suppliers to 'support' the centre, which it says will 'benefit all our business partners'.

Another supplier said it would try to make a deal with Majestic. Adding that the latest news "came out of the blue", he said that, "when you do what we do you come to expect this sort of thing".

One jaded supplier said: "Nothing surprises me."

A statement from Majestic read: "This new centre is a major investment, offering vastly improved distribution capabilities, efficiencies in the supply chain and sufficient capacity to reach our goal of 330 stores.

"We are confident that the centre will facilitate the growth of our business, but it will also benefit all our business partners. We have therefore asked suppliers for their support during this short transition phase.

"The commercial arrangements between Majestic and our business partners are, as you would expect, confidential and it is not appropriate to comment further."

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