Flower suppliers accuse Shoprite of reneging on long-term contract
The Gauteng companies say that if their contracts with the retailer are not renewed, hundreds of jobs could be at stake
Gauteng flower suppliers who supply Shoprite Checkers have claimed the retailer reneged on their long-term contracts without warning, potentially destroying their businesses.
In a legal letter sent to the Shoprite Checkers head office on December 20, the four companies, which supply branches across Johannesburg and Pretoria, alleged that if the contracts are not renewed — or at least extended for the next six months — there could be hundreds of jobs at stake.
Bunches for Africa, Dezina Flora, Heide Bloemiste and one other company that requested anonymity, wrote through their attorney Charl Albasini that the four florists have had mutual beneficial business relationships with Shoprite for more than 10 years.
“During a meeting [in April 2018 with] the horticulture buyer of your organisation … our clients were informed to invest in their respective enterprises as the relationship between them and yourself would extend into the future and will continue for more than two years,” Albasini’s letter reads.
This sudden and unilateral decision is tantamount to a breach of contract … which will result in our clients suffering extreme prejudice and financial harm, not to mention the effect [on] some 400 mouths to feed.Attorney Charl Albasini
The letter details how the flower suppliers have all invested in new equipment, and hired more staff and vehicles, based on this agreement. However, on December 6 2018, the group claims it received correspondence from the company “effectively reneging” on the agreement, with instructions to speak to another contact at the company should it have any queries. Despite numerous attempts to speak to the mutual contact, they initially received no reply.
“It is our respectful submission that this sudden and unilateral decision is tantamount to a breach of contract on your part which will result in our clients suffering extreme prejudice and financial harm, not to mention the effect [on] some 400 mouths to feed due to loss of employment, retrenchment, union action against our clients and possibly yourselves, as well as legal action against our clients, due to them not being able to meet their obligations to their creditors, which arose due to the aforementioned meeting during April this year,” the letter continues.
The group claims it has never received any indication that Shoprite was unhappy with their services, with only the correspondence from December claiming “poor and inconsistent presentation”. The suppliers deny this emphatically.
The group asked that the retailer commit to “an exit plan of at least six months”, during which they would attempt to restructure their businesses. During this time, the florists said, they would be happy to assist in providing their services, and that during this time Shoprite would be able to settle “all and any outstanding accounts” with them.
Albasini said negotiations with Shoprite were ongoing as of this week.
In a written response from the Shoprite media team asking about the reasoning behind the attempts to sever the contracts, the company said: “The decision was taken after Shoprite looked at how to offer consumers a better-quality product with a longer shelf-life. Maintaining the cold chain integrity of flowers is essential and as a result a decision was taken and communicated to suppliers in October 2018 to centralise the flower supply chain.”
While Shoprite declined to comment on the current negotiations, the retailer avoided queries about whether it was common business practice to sever ties with suppliers with only a few days’ warning.
The response read: “The Shoprite Group procures from thousands of supplier companies and bases its business practices on fairness and integrity.”