FSI

Contact The Insider

If you have questions feel free to reach out to me by email here, or call me at my offices 719.576.3264, as we are here to assist in any way we can in bringing transparency to the industry. I am also available to answer questions for you, or your supply chain team, as issues may arise or speak at your function as you may see fit.


Thank you for your interest in the Foodservice Insider.

-Jerry Wilhite

 

INDUSTRY WORKING GROUP

Smoke Jumpers Magazine

March 2019

FSIC Inc's Jerry Wilhite [FoodService Insider] guest authored an article about the Gregory Packaging vs FoodBuy decision, the GPO space, and what it means for the industry. 

With GPOs, there’s no clarity around participation costs, and location-level integrity poses major problems.

GPOs’ message to manufacturers has always been, “Give us a program and we’ll both make a lot of money.” But manufacturers are the ones required to pay to participate. And, even with a partnership, there’s no clarity around the operation. There’s no way to know how the deals impact business. Did it gain new customers? Did the program have any impact on the operator?

Additionally, GPOs are infamous for double dipping and overbilling. Think of it like this: If a manufacturer gives a $10 rebate and only $2.50 flows through to the customer, it costs them $7.50 to be in that GPO program. Then, the manufacturer is tasked with validating the billback on every case, even though they don’t have sufficient data or the resources to manual complete the process.

Read the full article in Smoke Jumpers magazine. Subscribe for free here: 

This historically lopsided arrangement now seems poised to shift. In November 2018, Gregory Packaging, a juice manufacturer, won a multi-million dollar judgment against Foodbuy, the largest foodservice GPO in the US. At the end of their agreement, Gregory Packaging refused to pay the final four months of invoices, alleging that Foodbuy had over-invoiced them for millions of dollars worth of volume allowances over their five-year contract, which was based on Foodbuy’s template supplier agreement. Foodbuy sued Gregory Packaging for the volume allowances. Gregory Packaging counterclaimed, alleging the over-invoicing was a breach of the Foodbuy Supplier Agreement.

The Court ruled in favor of Gregory Packaging, agreeing they had been over-invoiced and that Foodbuy had wrongfully collected rebates. The court awarded Gregory Packaging $9.265 million.

Subscribe to the magazine to find out what Foodbuy admitted to during trial.
(If you’d like, you can read the full legal findings of the lawsuit.)

Call To Action:

Industry Working Group

We are committed to bringing transparency to the GPO space. Our video below is a plan of action to drive billions of dollars of excess costs out of the industry.

Join Us!

If you would like to join the Industry Working Group Committee Please Contact:

FSICI vs GPO.jpg

#FoodServiceInsider

©2019 by FoodService Insider

FSCI_New Tagline Heavy 4-30-18 Trnsprnt.
  • LinkedIn - Black Circle
  • LinkedIn - Black Circle
  • YouTube - Black Circle
  • Facebook - Black Circle
  • Twitter - Black Circle
  • Instagram - Black Circle