Bullying Suppliers Goes To A Whole New Level

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.

If you want full coverage, you can check out the PG articles from today and August 31. But here are the key points:

• 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.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
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