Slotting Fee Agreement

October 8, 2021

In addition to housing costs, retailers may also charge advertising, advertising and storage fees. According to an FTC study, the practice is “widespread” in the supermarket sector. [5] Many grocers earn more if they agree to run the product from a manufacturer than if they actually sell the product to retail customers. Fees can be used to effectively allocate limited shelf space in retail, offset the risk of new product failure between manufacturers and retailers, help manufacturers report private information about the potential success of new products, and increase retail distribution for manufacturers by reducing competition in retail. [6] For suppliers, housing costs can be a step for the food industry to profit from it at the expense of its suppliers. (12) However, competition between incumbents and new entrants to the retail trade is generally known as the `level playing field`, since all manufacturers can compete openly with shelf areas and the manufacturer is willing to pay the most for a given area that it receives. Both of these theories are based on an increase in supermarket costs linked to the introduction of new products to explain the growth of slotting. . . .

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