Product manufacturers want to force retailers to coordinate orders

Product manufacturers are looking for new opportunities to oblige retail chains to coordinate orders in order to avoid the risks of non-fulfillment of contracts and fines. Having not achieved compliance with this self-regulation norm from all networks, suppliers advocated changes in legislation. The chains see in the initiative the risks of unfair competition from manufacturers and supply disruptions.

The Chamber of Suppliers of the Interindustry Expert Council (unites Soyuznapitki, Soyuzmoloko, Rusprodsoyuz, etc.) proposes to legally oblige retail chains to request confirmation of orders from suppliers. Kommersant has a copy of the corresponding letter to the Association of Retail Trade Companies (AKORT; includes X5 Group, Magnit, Lenta, etc.) dated December 5. As stated in the materials of the suppliers, from seven members of AKORT any order is required, and refusal without penalty is possible only in case of force majeure. According to the Code of Good Practices (CBP), the letter says, the order is approved only after confirmation from the supplier. Although the networks have more than once declared their adherence to the KDP, there are difficulties in complying with the norm, the appeal says.

General Director of Infoline-Analytics Mikhail Burmistrov notes that order coordination is a key issue in relations between suppliers and networks, since supply problems worsened first due to the pandemic, then with the outbreak of hostilities in Ukraine, the departure of some global companies and tightening sanctions .

President of Soyuznapitka Maxim Novikov points out that for many chains, an order is considered confirmed if there is no response to an email after a certain time. And manufacturers, he notes, cannot always quickly redirect batches or produce additional volume. According to Mr. Novikov, the imbalance is especially pronounced in shock situations, when networks seek to replenish warehouse stocks.

The executive director of Rusprodsoyuz, Dmitry Vostrikov, points out that networks can impose fines for failure to fulfill orders over the past three years, which threatens damage even for large enterprises. According to him, the concept of the bill obliging the approval of orders was approved at the working groups of the Duma faction of United Russia, supported by the Ministry of Agriculture and the Federal Antimonopoly Service (FAS) and the document can be submitted to the State Duma in the near future. The Committee on Agrarian Issues of the State Duma, the Ministry of Agriculture, the Federal Antimonopoly Service and the Ministry of Industry and Trade did not provide comments.

Chairman of the Presidium of AKORT Igor Karavaev says that the approval of each order will create grounds for unfair competition. Some suppliers will announce lower prices and then refuse to supply, demanding higher prices, which threatens local supply disruptions, he warns. According to Mr. Karavaev, controversial situations with excess order volumes are exceptions and are resolved by self-regulation.

X5 (Pyaterochka and Perekrestok chains) say that their standard contract is drawn up in accordance with the KDP and includes order confirmation. ABC of Taste noted that suppliers can adjust order volumes based on feedback, but the obligation to obtain confirmation threatens to delay delivery times. Lenta discusses work on confirmed orders with suppliers.

A Kommersant source among suppliers says that networks may be more interested in resolving the issue through self-regulation under the threat of legislative intervention. Rusbrand executive director Alexey Popovichev points out that if players like X5 have implemented order confirmation, others should not have problems. Senior analyst at Gazprombank Marat Ibragimov notes that the measure may complicate the business of retailers, but also increase competition for reliable suppliers, as well as encourage them to look for long-term partners. Although Mr. Burmistrov notes that the execution of orders depends on many factors that cannot be prescribed, and general amendments to the trade law can only increase turbulence in the market.

Anatoly Kostyrev