How Delta makes its profits

Several food producers have told B92 what Delta offers to them as far as margins are concerned.

Izvor: B92

Thursday, 29.11.2007.

10:40

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Several food producers have told B92 what Delta offers to them as far as margins are concerned. Delta gives product placement offers to food suppliers in Delta-owned stores, such as Maxi, Mini Maxi and Tempo. How Delta makes its profits The offers call on the suppliers to lower their prices by between 30 and 40 percent, which does not mean that the products will be less expensive, but that Delta will make more money. According to offers given to B92 by several suppliers for placing their products in Delta-owned stores, all kinds of bread need to be 30 percent cheaper, pastry prices have to be reduced by 33 percent, breadcrumbs 38 percent, pizza and pie crusts 33 percent, and all frozen food products need to be 37 percent cheaper. There are also several contractual terms and conditions within the offers made by Maxi Food Product Director Bojan Grbovic. For example, all later cooperation and product positioning depends on the answer given to the Delta offer. Also, in order to do business with Delta, when they give the company a discount, they must accept terms that stipulate that Delta has 60 days to pay invoices for bread products, and as much as 90 days for frozen foods. Suppliers said that an initial RSD 200,000 (about EUR 2,500) had to be paid in order to place products in Delta stores, compared to Slovenian Merkator that asks for ten times less per product.

How Delta makes its profits

The offers call on the suppliers to lower their prices by between 30 and 40 percent, which does not mean that the products will be less expensive, but that Delta will make more money.

According to offers given to B92 by several suppliers for placing their products in Delta-owned stores, all kinds of bread need to be 30 percent cheaper, pastry prices have to be reduced by 33 percent, breadcrumbs 38 percent, pizza and pie crusts 33 percent, and all frozen food products need to be 37 percent cheaper.

There are also several contractual terms and conditions within the offers made by Maxi Food Product Director Bojan Grbović. For example, all later cooperation and product positioning depends on the answer given to the Delta offer.

Also, in order to do business with Delta, when they give the company a discount, they must accept terms that stipulate that Delta has 60 days to pay invoices for bread products, and as much as 90 days for frozen foods.

Suppliers said that an initial RSD 200,000 (about EUR 2,500) had to be paid in order to place products in Delta stores, compared to Slovenian Merkator that asks for ten times less per product.

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