Richard Siddle: retailers and suppliers must find fairer and more profitable ways of working together

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Last month Tesco’s chief executive, Philip Clarke, declared to the IGD’s main convention of the year that it was vital the grocery industry “create a new spirit of partnership … going much deeper and becoming much stronger than anything that has existed before”. The reason? Well the pace of change is now so fast that retailers and suppliers have to be virtually sleeping with each other to make sure they get the best out of each other.

 

We have heard similar calls for retailer and supplier love-ins in the past, only for it all to end in tears and a government enquiry into how badly they are supposed to not work with each other.

 

This time, however, the need for retailers and suppliers to find realistic and effective ways of working together is an absolute necessity.

 

Already extremely difficult trading conditions are about to get a whole lot worse as the trade comes to terms with what could be up to 260 million hectolitres less wine to sell thanks to low harvests all over the planet.

 

The knock-on effect is likely to be painful for some and potentially terminal for others as there is simply not enough wine to go around. And what there is going to be the subject of one almighty auction as producers, brokers, distributors and buyers all battle it out for the best price wine on the market.

 

In normal business circumstances those prices would have to go up across the board, but we all know the wine trade has an uncanny knack of staring adversity in its face and somehow operating of even less margin.

 

But surely there is no more margin to give and if the trade is to go through 2013 working within a sustainable wine business then we must all not only heed Philip Clarke’s wise words but put them in to practice.

 

The trade desperately needs retailer and supplier partnerships that offer genuine fair trading terms so that all parts of the supply chain can not only survive but prosper in the years neve mind year ahead.

 

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