Stricter supplier terms are negatively impacting availability and pricing for retailers, as senior wholesalers have warned more are to follow.
Speaking at a supplier briefing in January, Holland Bazaar commercial director Andrew Kirby and The Wholesale Group joint managing director Coral Rose urged suppliers to re-examine the minimum order quantities (MOQs) imposed on wholesalers amid concerns over recent increases.
Kirby confirmed the cash and carry operator had begun sub-wholesaling to nearby wholesalers who were unable to meet recent increases in MOQs. He explained: “It’s given us more customers in a way because we can re-wholesale to the smaller guys.
“Our key ask would be a bit more price parity between ourselves and national retailers. As big as we are, we can go to Tesco’s back doors and buy cheaper from there than direct from the supplier. We’re willing to support anything but we want a fair playing field so we can support customers at a fair rate.”
Several senior wholesalers speaking to Better Retailing separately after the supplier briefing claimed Mondelez, PepsiCo and Mars were among those who had recently raised their MOQs in the last year.
Read more: Diageo to stop supply to wholesalers under strict new criteria
One explained: “It is going to have a negative impact for some smaller wholesalers, but for others it can be beneficial. They improve their availability and stockholding to manage the increases. Suppliers claim they’re implementing these changes for sustainability, but it’s all actually cost-cutting.
“The bigger issue is we’re seeing much smaller and local suppliers do it now and they’re putting their MOQs up to a ridiculous level. We can’t physically meet what they’re requiring and there’s no other way to get their products. It is harming the sector and all suppliers are going to do it as the year goes on.”
A Mondelez spokesperson confirmed the recent increases to Better Retailing, adding: “We always look to develop and maintain strong working relationships with our valued customers. They are a vital part of our supply chain and any changes we make that will impact them are carefully considered.
“To promote efficiencies, support our environmental targets, and improve customer service we have taken the decision to increase the minimum order quantity (MOQ) for customers ordering products from our snacking categories.
Mondelez did not confirm or deny whether further MOQ increases were planned when asked by Better Retailing. PepsiCo and Mars have also been approached for comment.
In 2024, Diageo notably cut off supply to wholesalers unable to meet stricter ordering terms, impacting supply to retailers. Wholesale experts at the time predicted more suppliers were to follow.
