Bullying suppliers – while generally regarded as old-school and having little place in today’s business world – still is a common practice, particularly among the largest buyers in certain markets. But recent articles in the Pittsburgh Post-Gazette have shed some light on a story where bullying suppliers has gone to a whole new level.
- LeNature’s – a bankrupt beverage bottling company – was up for auction
- Giant Eagle, a large regional grocery store chain, and Cadbury were two of the bidders
- Cadbury is a supplier to Giant Eagle
- Just prior to the auction, Giant Eagle sent a letter to Cadbury apparently stating that “it was terminating the purchase of about $7 million in goods annually” in an alleged attempt to “intimidate” Cadbury into dropping out of the bidding
- Giant Eagle was the high bidder in the auction
- U.S. Bankruptcy Court Chief Judge M. Bruce McCullough vetoed the sale of Le-Nature’s Latrobe plant to Giant Eagle, on account of the alleged intimidation
- Lawyers previously have said Giant Eagle’s actions also could become the subject of a federal investigation.
- There’s all kind of legal action circulating that is almost too confusing to follow, but a settlement is being considered
The bottom line is this: being firm with suppliers is totally acceptable and, at times, expected of you. But there is a line. Think carefully about where that line is and don’t cross it. You may never be involved in competing with a supplier to purchase a bankrupt company, but in every day procurement negotiations, it’s smart to know when firmness is actually bullying.