Lawsuit
Opera The food distributor/retailer relationship is receiving a lot of attention in the press these days. Most of it has been driven by a widely publicized legal case between Fleming Cos. and David's Supermarkets, a Texas retailer. It is disturbing that this single case -- an aberration -- is being used to call into question the relationship between wholesalers and their retailers.
The case would make a fine soap opera: a retailer in financial trouble, a ridiculously high judgment (since set aside) and a judge who ultimately had to step aside. Fleming, an 81-year-old company and a longtime member of this trade association, is a fine company that has thousands of satisfied customers. Looking beyond that, there are hundreds of distributors with thousands more satisfied retail customers. But that's not what we're reading about. We seldom see headlines that say: "Customers Happy, Everything's Fine." So I guess the attention this case is receiving is inevitable. The problem is that this case is being used to raise broader issues.
The speculation about whether the case will spawn "copycat" lawsuits is particularly disturbing. Some of my members have told me "there but for the grace of God go I." The proliferation of these kinds of lawsuits would be extremely damaging in the long- term to wholesalers and retailers, particularly as the industry strives to implement ECR.
A good bit of discussion has also ensued about how the Fleming vs. David's case is going to impact the complexity of contracts between distributors and their retail customers. There seems to be a consensus that more legal language is going to be involved in contracts. That's all well and good if the legalese really clarifies arrangements. But if we end up with contracts that are thicker and more confusing and subject to interpretation only by lawyers and judges, no one in the industry will be well-served. The last thing food distributors and their independent retailers need to do is create a situation where the legal department must be consulted every time another pallet of paper towels is ordered.
I believe in seeing the glass half-full rather than half-empty. Instead of using the case as a jumping-off point for paranoia and lawsuits, retailers and distributors should take this opportunity to renew and improve their communication and understanding.
