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"Andrew":2icdeg17 wrote: This is why I am willing to pay €10 for 4 at the Drinkstore rather than €10 for 5 at Tescos. There's a much fairer deal going on between the Brewer, Stockist and Customer[/quote:2icdeg17]
The customer is paying more, so by definition they're getting a worse deal.

I do know that without seeing the books I have no idea who is paying what for what, so I wouldn't assume anything. The increased retail price at some outlets can also be partly attributed to higher distributions costs, higher rents etc.

It is true that the multiples use purchasing power to drive down the price they pay, but they will sell a greater volume. No-one would be selling to Tesco if it wasn't beneficial to them.

"Tube":10u6hmig wrote: It is true that the multiples use purchasing power to drive down the price they pay, but they will sell a greater volume. No-one would be selling to Tesco if it wasn't beneficial to them.[/quote:10u6hmig]

It is not beneficial to a lot of suppliers but they a forced to do business with the likes of Tescos because Tescos makes the supplier (especially the smaller suppliers) dependent on them, usually forcing exclusivity deals from them in the process. Also, there seems to be a perceived wisdom that a product has to be seen on the shelf at Tescos, if it's not there then it must be a problem at the supplier end (that problem usually is that the supplier refuses to deliver at below cost or pay Hello Money).

I know quite a few artisan suppliers who will not deal with the likes of Tescos because of Tescos' business practises. I also know another who went out of business because he signed an exclusivity deal (with another big chain not Tescos) only to be told after a few months that his product was no longer wanted- and there was no way back with his previous customers after that.

There is no doubt Tesco etc are in it for the money, and you should approach the multiples with caution, and get independent advice from someone who is experienced in such things.

I'm sure the Tesco deal with O'Hara's is good for O'Hara's as it's not an exclusive deal and O'Hara's are dealing with multiples long enough to know how to handle them.

A family member was in a similar business and their product had a 10c gross margin for them in the multiples, while it had a 50c gross margin in a corner shop, yet the multiples sold so much that they decided to do away with the supplying to corner shops altogether. I said gross margin as costs of delivering to and supporting the smaller shops was far greater than doing a few bulk drops at the warehouses of the multiples.

"Tube <!-- s:x --><img wrote: A family member was in a similar business and their product had a 10c gross margin for them in the multiples, while it had a 50c gross margin in a corner shop, yet the multiples sold so much that they decided to do away with the supplying to corner shops altogether. I said gross margin as costs of delivering to and supporting the smaller shops was far greater than doing a few bulk drops at the warehouses of the multiples.[/quote:28nfno45]

As I said previously, that's fine unless the multiple decides to drop your product. Good luck getting back into the corner shops after that. If the corner shops have not been driven out of business by then.