A letter to The Grocer which accuses Safeway of threatening to axe its suppliers unless they make upfront payments to the retailer has been flagged up by The Daily Telegraph.
The comments emerged as the Office of Fair Trading is considering bids for Safeway, a process which receives input from various trade groups including suppliers.
An unnamed supplier wrote: "Safeway is certainly a focused business on threatening its suppliers to bolster its short-term cash and profits.
"Demands for six-figure payments (in cash and by the end of March, if you please) breach the Government's code of practice.
“These sums must add up to many millions, and one wonders how Safeway's profitability would look without these one-off payments."
A spokesman for Safeway told the paper: "At this time of year we and our competition normally review the profits that some suppliers have made from us and the prospective business for the months ahead. We then have a negotiation."
The Telegraph added that the letter would be well received by Morrisons, which is styling itself as the friend of the supplier in its efforts to win regulatory approval for its bid for Safeway.
US buyout specialists Kohlberg Kravis Roberts is said to be frustrated with the amount of information it has received from Safeway, The Financial Times reported on Saturday. Some information which KKR considers relevant to whether to proceed with a formal bid has been has categorised as ‘market sensitive’ by Safeway.
Philip Green has promised the OFT that he will run Safeway as a going concern if he succeeds in a takeover bid, according to The Business. Green proposes to put together a retail team to run Safeway rather than break it up for sale.
Head office morale at Safeway has slumped at the prospect of a lengthy review of the bids for the chain. The Sunday Times said that not only the spirit of the staff was at risk but also the fabric of the company. A source told the paper that a large proportion of Safeway’s head-office staff would lose their jobs as a result of a takeover.
The comments emerged as the Office of Fair Trading is considering bids for Safeway, a process which receives input from various trade groups including suppliers.
An unnamed supplier wrote: "Safeway is certainly a focused business on threatening its suppliers to bolster its short-term cash and profits.
"Demands for six-figure payments (in cash and by the end of March, if you please) breach the Government's code of practice.
“These sums must add up to many millions, and one wonders how Safeway's profitability would look without these one-off payments."
A spokesman for Safeway told the paper: "At this time of year we and our competition normally review the profits that some suppliers have made from us and the prospective business for the months ahead. We then have a negotiation."
The Telegraph added that the letter would be well received by Morrisons, which is styling itself as the friend of the supplier in its efforts to win regulatory approval for its bid for Safeway.
US buyout specialists Kohlberg Kravis Roberts is said to be frustrated with the amount of information it has received from Safeway, The Financial Times reported on Saturday. Some information which KKR considers relevant to whether to proceed with a formal bid has been has categorised as ‘market sensitive’ by Safeway.
Philip Green has promised the OFT that he will run Safeway as a going concern if he succeeds in a takeover bid, according to The Business. Green proposes to put together a retail team to run Safeway rather than break it up for sale.
Head office morale at Safeway has slumped at the prospect of a lengthy review of the bids for the chain. The Sunday Times said that not only the spirit of the staff was at risk but also the fabric of the company. A source told the paper that a large proportion of Safeway’s head-office staff would lose their jobs as a result of a takeover.
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