Kroger has proposed and is considering a plan that would place a third-party distributor in charge of what brands get what prominence on their shelves, a move that might come as bad news for companies that sell alcohol.
Alcohol companies (uniquely in this new arrangement) will have to pay for the distributor’s services, a move that smaller labels worry puts them at a disadvantage since finding money to pay a distributor may be difficult given their much, much tighter margins, Nasdaq reported.
Of course, the old system wasn’t exactly great for small distributors either since it relied on “category captains” like Anheuser-Busch as the driving force in advice on what labels go on what shelf space.
The new system would also implement a voluntary quarterly fee for alcohol producers, based partially on how much volume a store carries.
Kroger is pushing the plan in an attempt to more fluidly arrange its store shelves in an attempt to keep up with consumer preferences, which have a tendency to evolve quickly these days. The grocery giant noted that these changes are today made inconsistently.
Given Kroger’s size, smaller labels are worried that this could be the beginning of a trend.
“What stops every other grocer from doing the same thing?” said Paul Gatza, director of craft beer organization Brewers Association. “Then it costs a lot of money to get on the shelves.”
Kroger says the chain will make shelf use choices based on “unbiased” direction drawn from customer data, according to Kroger spokesman Keith Dailey.