A controversial advertising campaign by Palmer & Harvey McLane for grey market soft drinks has reignited debate over pricing differentials on branded consumer goods. In the ad ­ which appeared in this magazine ­ the delivered wholesaler promotes a special deal on Pepsi and 7-Up. Cans bought in the EU are being sold for £3.99 a case ­ compared with £6.48 for UK sourced Pepsi and £6.32 for 7-Up. Sourcing branded goods on the grey market is completely legitimate and has become a widespread practice among the independent and multiple sectors. But it is highly unusual for a wholesaler to shout about it.One rival accused P&H of "rubbing Britvic's nose in it" and said: "If they want to buy on the grey market, why don't they do it quietly?" Another said the move was "weird" given Britvic's support for the independent and wholesale sectors. P&H is playing down the issue. Bill Ellis, independent sales director, said: "We are being totally open about what we are doing. We are not looking to pick a fight with suppliers of UK sourced product but to encourage the elimination of untenable differentials." But Mike McGee, md of the Landmark buying group, said such tactics could damage trading relationships. "We have spent several years working with Britvic to talk to Pepsi to try to eradicate this issue. But there seems to be a limited willingness from Pepsi Worldwide to deal with this situation." He added: "Pepsi needs to recognise there's a European market and deal with it in the same way as P&G." Other wholesalers have complained that suppliers ignore their complaints about the price differential problem, which fuels the grey market. - The British Retail Consortium this week strongly criticised suppliers who insisted on charging more for their big brands in this country than on the continent. {{NEWS }}

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