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Sanitarium’s decision to cut off The Warehouse was not fair, the latter said.
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The Warehouse has laid a complaint with the Commerce Commission about food producer Sanitarium’s decision to cut off its supply of breakfast cereal, Weet-Bix, from the end of the month.
The Warehouse has been expanding its grocery business, which grew to account for 18 percent of the group’s total sales in the year ended July.
However, chief executive Nick Grayston said the expansion had been tough to achieve, despite legislation and the Grocery Code of Conduct that came into force on Thursday.
He said while Weet-Bix products were said to be in short supply, Sanitarium’s decision to cut off The Warehouse was not fair, as it was continuing to supply the big two grocery chains.
Sanitarium said in a statement it would not comment on its production capacities and stock levels, nor its commercial relationships with customers.
However, the Commerce Commission took a dim view of the allegations.
“We have received information in the past few days from The Warehouse Group in regards to Sanitarium and an alleged supply issue, which we understand relates to Weet-Bix,” commission chair John Small said.
“The nature of what is being brought to our attention is extremely concerning, and we are reaching out to Sanitarium to seek an explanation for what is happening.
“We are also considering the potential ongoing implications for competition in the grocery sector – particularly given The Warehouse Group’s stated strategy of expanding in the sector.”
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