Slotting Fees In Grocery Industry

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Grocery Industry Focus | Slotting Fees: | Debating legality | Zappala, Anthony 10/30/2011 | Abstract: The purpose of this paper is to take a closer look into the practice of slotting fees in the grocery industry. First, the paper will focus on highlighting the key components in the efficiency school of thought, concerning slotting fees. A brief argument will be made against the market powers school, which contends slotting fees cause more harm than benefit. Then shifting the focus towards the debate as to whether or not the establishment of slotting fees has developed into an illegal practice that harms the consumer. Important Findings: * “Our ability to comment about the relevance of the various theories of slotting based on our study is limited, however. Neither the academic and market researchers who developed the theories nor others have detailed how the theories could be tested with real world data.” (FTC, 62) * “Perhaps the most significant finding from this set of government activities [2001, FTC full scale public hearings on slotting allowances] was the consistent difficulty in uncovering information on the slotting phenomenon.” (Wilkie, 275) Foreword: The above quotes display the current problem surrounding the possible modification in the practice of slotting fees. Theories have been developed to detail the uses and necessity, or lack thereof, the various monetary transactions occurring between manufacturing companies and their retailing counterparts. However, due to both a lack of information and cooperation from the majority of businesses in the grocery industry, the exact figures cannot be used to further prove or discriminate against these theories. Practical business knowledge and logical assumptions must be made in order to detail the various effects slotting fees are predicted to have on the grocery industry, the U.S.
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