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"Ground stack fees" and "special display fees" were originally normal investments by brands in supermarkets to increase product visibility and boost sales.
However, some staff at large supermarkets have abused their positions to demand kickbacks from suppliers under the guise of "ground stack fees" and "special display fees," disrupting fair market competition.
Recently, the Shanghai Municipal Market Supervision Administration issued a notice stating that Poli Food Industry (Kunshan) Co., Ltd., starting from January 2013, in order to secure better product placement and increase transaction opportunities, gave kickbacks to staff at large supermarkets such as Carrefour, RT-Mart, Metro, and Walmart, amounting to 4%-10% of each store's purchase amount, off the books. According to an audit, the party concerned gained RMB 1,838,622.23 in illegal profits.
After investigation, law enforcement found multiple documents titled "Loan Application Form (in lieu of loan receipt)" that clearly recorded the kickback amounts paid to staff at several large supermarkets in Shanghai.
After sorting and consolidating the capital chain, investigators traced multiple supermarket supervisors who accepted kickbacks, as well as more than thirty bribe-paying units, including the party concerned. In accordance with Article 22 of the Anti-Unfair Competition Law of the People's Republic of China (1993), the company was ordered to disgorge illegal gains of RMB 1,838,622.23 and fined RMB 100,000. In addition, nine bribe-paying units in this series of cases were penalized, involving over 900 individuals, with total fines and confiscations exceeding 10 million yuan, and 12 people were held criminally liable.
This incident not only serves as a wake-up call for companies and supermarket managers but also prompts us to reflect.
Whether it is brands giving kickbacks or supermarket managers taking them, both are illegal and must be resolutely prohibited. At the same time, brands and supermarkets should strengthen training for their internal managers, especially those in key positions, to prevent illegal activities.
Those familiar with the supermarket channel know that brands need to pay various fees to enter supermarkets, including entry fees, barcode fees, display fees, pallet fees, and promotional fees. In addition, companies and distributors also bear certain payment terms.
In previous years, supermarkets were one of the main distribution channels for FMCG because they could accommodate more products and consumers. However, even in large supermarkets, shelf positions vary in quality, so supermarkets introduced display fees and pallet fees to reserve prime positions for brands that need them and can afford them. Of course, in supermarkets, the best shelf positions have always been occupied by leading brands.
Good displays indeed bring sales to brands, but with the development of new retail, the rapid expansion of community stores and chain convenience stores, and the growth of e-commerce, foot traffic in supermarkets in first- and second-tier cities has been dispersed and diluted. At this point, the superiority of display positions becomes even more evident.
The entry fees, display fees, and other charges collected by supermarkets are normal business transactions—customers pay a certain amount to purchase premium positions, which aligns with market principles.
However, in recent years, due to long payment terms, high fees, and declining foot traffic, some distributors have withdrawn from hypermarkets and shifted to new retail channels. This indicates that the supermarket channel is no longer a crucial channel for distributors. Therefore, supermarkets should focus on store operations, improving consumer experience, and attracting more traffic.
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