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"The Seventh Continent" conducts shock action for suppliers

As it became known to RBC daily, the capital retailer "Seventh Continent" compels suppliers to participate in "Shock-price" action. The network has decided to sell customers products with the lowest price tag in the city at the expense of counterparts who are forced to sign supply contracts with a discount of up to 50%. In case of refusal to participate in the rally suppliers threaten the withdrawal of goods from the shops "Seventh Continent".

Two suppliers  of "Seventh Continent" explained RBC daily, that since early May participate in "Shock-price" action, which involves selling goods

with an impressive discount, became obligatory for contracting network. Another three suppliers have confirmed the fact that the network is forcing them to go to a discount, which can reach up to 50%.


According to one of the counterparties of trading company, in October 2010 and early spring, he participated in a "shock-price" action on a voluntary order. "In fact, participation in this action - a good way to dispose of surplus production", - said the interlocutor of RBC daily. The general director of the company «Dairy product» Alex Efremenko agrees with him: "We participated in the 15 per cent discount action under the provision of "The Seventh Continent" and received double and triple turnover. This is beneficial for us, trading network, and the final consumer  too."

Now, similar advantages in working with network providers will be able to get all the suppliers of "Seventh Continent". According to the retailer's suppliers, "Shock-price" from the category of voluntary action goes into the category of mandatory. Now, "The Seventh Continent" independently decides which suppliers are involved in the action and, therefore, companies sell goods at a discount of 15 to 50% on а full supply volume, telling the interlocutors of RBC  daily.

In case of refusal to provide a discount of the products on merchandise manager of the network threatens to deprive the provider places on the shelves in "Seventh Continent". "The nature of coercion is already giving rudeness, - complains contractor retailer. - But closing range as a measure of the impact on suppliers is working".

At the disposal of RBC daily there was a correspondence of the supplier of a trading network with the manager of "the Seventh continent» Anna Nesterova. For example, in the letter from the May, 10th, 2011, sent more than 50 suppliers, Mrs. Nesterova wrote (the author's style is saved. — RBC daily): "Dear partners, if tomorrow to 11.00 will not be applications for SHOCK 11 hypermarket (discount + price Catalog 100 000 rub.) I will start to output range. She adds that anyone who has not sent a request to participate,  will be closed on 3 SKU (ID heading) from May 12, 2011".
Incorrect filling of the letter of guarantee shall be punishable by the withdrawal of products.

For example, in a letter dated May 18, Mrs. Nesterova said: "I earnestly request the first and last time to fill correctly and send the application in time." She also said that "those who can not read in Russian or may not fill the table once and for all the graphs, without exception, I will teach personally - every mistake or incorrectly filled / unfilled order will be punished by withdrawal from the range of 1 SKU".

In the same letter, she states: "Applications for the shares held by us should send all suppliers - please do not bring to the adoption of tough measures against suppliers that ignore the action." Among the destinations featured such major companies as "Makfa", "Mistral", "Nastya", "Bonduelle", "Cadbury", "Wrigley", "Nestle", "Danone", "Nutritek". Companies prefer not to comment officially this situation to avoid conflict with the network. Retailer did not respond to a request from RBC daily yesterday.