Distributors urge suppliers to vet new accounts

Major catering equipment distributors are calling on suppliers to give closer scrutiny to new trade accounts they open in order to protect the value offered by bonafide kitchen houses.

Dealers claim that difficult market conditions over recent years have led to manufacturers becoming less particular over who they do business with in order to secure orders. But with conditions improving, many believe that a firmer approach is required.

Claire Batt, director of Bury St Edmunds-based distributor Akro, said she was aware of an unusual situation whereby an end-user planned to create a distribution entity just to secure equipment at cost price.

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“Manufacturers should validate new accounts,” she said. “A company I know of is setting himself up as a catering equipment supplier in order to refurbish a kitchen at his own venue at cost. This is extremely unfair to distributors out there and knowing his track record I would be surprised if all the manufacturers would get paid.”

The topic of account validation was also raised during a recent roundtable discussion on distributor value hosted by Catering Insight, excerpts of which will be published in the May issue of the magazine.

Distributors feel that some manufacturers are guilty of opening up their sales channels too widely and making product available to everyone, regardless of pedigree or history.

Tim Taylor, MD of Ecomax Catering Equipment, commented: “There’s a fine line between manufacturers opening accounts too freely and sitting down with the distributor to find out what is going on, getting a bit of background and understanding what the deal is before they open an account.”

Taylor suggested that distributors which had worked to develop an opportunity for a brand over a sustained period of time deserved to be protected from someone coming in at the last minute to win the deal by offering a heavily discounted price.

Paul Gilhooly, head of sales at Gratte Brothers, believes the onus is on manufacturers to “differentiate” between different types of distributor and their potential or actual spend when validating new accounts.

“It is really important for suppliers to distinguish between the single guy in his bedroom with a laptop and a proper, multi-site distributor that is in CEDA and doing all the right things. There is a real gulf in their own costs and the margins they have to make, and in the spend or potential spend that they can build with that supplier. We don’t mind any other company accessing products that we access at the same level, as long as they are giving the suppliers the same value we give.”

 

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