There’s a grocery rebate rumble

Australia’s supermarkets are back in the pricing spotlight, and there’s trouble in paradise when it comes to supplier relationships.

In August two of the country’s largest retailers, Coles and Woolworths, shared their financial results, posting profits in excess of $1 billion each. Amid the consumer cost-of-living crisis, the dramatic lift in earnings raised eyebrows but it’s not just shoppers who have taken issue with the retail giants. Manufacturers have come forward claiming that all the major grocery chains are short-changing them by making unauthorised deductions from their invoices.

Woolworths says that such deductions go against its policies and has vowed to look into the allegations as a matter of urgency but when relationships between manufacturers and retailers are already delicate, and tension over invoice and payment confusion is the last thing either party needs.

To get back on better terms, both retailers and suppliers need to be confident in the amount they are charging or expecting.

Rebates and deductions are an essential part of the retailer-supplier financial relationship, but this case has proven that the traditional processes can’t cope with the volume and complexity of trade agreements and invoices the industry is managing. Audits of a business the size of Woolworths typically uncover millions of dollars worth of errors, leading to backdated claims, inevitably resulting in the tension we’re seeing right now.

Flintfox’s automated rebate management platform helps retailers and manufacturers take back control of trade agreements. Our Intelligent Pricing Platform processes, validates, and authorises claims against agreed trade promotion terms and then automatically executes against the claim. No more inaccuracies, no more lost cashflow to over or under-payments, no more disputes.

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