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Russia: Neighborhood discounter Verny kicks out again too expensive suppliers

Verny discount retail chain has withdrawn half of the products from the Beluga Group, a manufacturer and importer of alcoholic beverages, from the assortment of the chain.


Almost two dozen SKUs left store shelves, including Fox & Dogs whiskey, Devil's Island rum, as well as several brands of vodka, cognac and tinctures. All withdrawn items were replaced by other leading manufacturers.


One of the reasons for this decision of the network was the difference in purchase prices compared to some large retail chains. At the end of last year, it amounted to 6.5% not in favor of Verny. At the same time, the supplier refused to recognize such a difference as price discrimination, and set counter conditions for the retailer's proposals to reduce it, which were not beneficial to the network.


"The supplier was ready to slightly reduce the purchase prices for the buyers of the network, but on condition that we bring 10 more items into the assortment. This was unjustified from an economic point of view, since even without these positions, the assortment sold poorly and stood on store shelves like a dead weight. Additional positions would further aggravate this situation, "Verny explained.


In response to the retailer's decision to withdraw unpopular products from sale, the supplier increased prices for those items that were not affected by the cuts. In mid-March, their prices rose by 1.7 - 11.7%. And in early April, the supplier announced another price increase and immediately by 6 - 10% for 5 import items. The partner explained the last rise in price by an increase in the cost of raw materials used in production. "It is not advisable for us to keep products on the shelves that are not in demand among our customers. That is why we decided to withdraw more than half of the positions from the Beluga Group and replace them with more popular analogues from other manufacturers, "commented Anton Bakharev, commercial director of the Verny chain of stores.


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