Albertsons tells suppliers to eat the cost of tariffs: ‘We are not accepting cost increases’

• The Albertsons grocery chain adopts a hard approach to the pricesSaying to his suppliers that he will not accept any price increase, according to a letter from the merchandising chief of the company. “We do not accept cost increases,” said the letter, before speaking a process of approval in several parts for suppliers struck by samples.

One of the largest supermarket chains in America is to tell suppliers that they must eat cost increases due to increased rates.

Albertsons, which has 2,200 grocery stores across the United States, sent a letter to the suppliers at the end of March, explaining how it would deal with price increases.

“”[W]With a few exceptions, We do not accept cost increases Due to prices, ”read to the letter (the accent on the original).

“Suppliers are not authorized to include costs related to the prices in invoices Without prior authorization from Albertsons companies, “he said, adding:” Any invoice which includes such costs without prior authorization will be subject to a dispute and may lead to delays in payment. “”

The second American grocer explained that this policy came from his commitment “to maintain the value proposals that our customers expect”.

Instead, suppliers struck by prices will be forced to go through a process in several stages to “ask for a cost change” for the goods they provide in Albertsons, starting by giving the company 90 days in advance. They will have to fill in cost change forms, offer “a detailed explanation of the pricing impact” and submit documents to support, such as pricing reviews or import receipts.

Once all the documents are submitted, the supplier will have to wait another 30 days for Albertsons to examine. And even then, approval “is not guaranteed,” said the letter.

Albertsons did not respond to a request for comments on the letter.

The missive highlights one of the many tactics that retailers use to bypass the Trump administration prices, absolutely, on many imported articles.

After President Donald Trump imposed surprise prices on China at the end of February, Walmart tried a similar pressure tactic with its Chinese suppliers, asking them for major price reductions, in some cases up to 10%, according to Bloomberg. However, price reductions were not starting for some suppliers, the margins of which could be less than 2%, reported the point of sale, and Chinese officials quickly launched their own Walmart pressure campaign.

Meanwhile, Amazon also tries to renegotiate some of his orders to maintain low prices, CNBC reported. CEO Andy Jassy said at the exit That sellers on the platform would probably try to pass on higher costs to consumers, adding “I understand why”.

Trump's prices have disrupted the markets and lowered consumers' feeling, as buyers expect price increases due to the highest taxes on foreign trade in almost a century.

But Albertsons responds to detractors, is also a sign that the chain exercises its market power like a cake, forcing small suppliers to comply with its will.

With prices, “the cost of many items will increase, and suppliers will make their doors if they cannot cover these increased costs”, Matt Stoller, anti-monopoly specialist and director of research on American Economic Liberties Project, wrote Thursday, calling the Albertsons demanding “absurd”.

David Dayen, editor -in -chief of progressive magazine, The American Prospect, who discovered the letter, argued the sign that large companies could freely transmit price increases while small competitors would suffer or even make their doors.

“The grocery suppliers whose supply or manufacturing is abroad has clearly engaged costs on its products, but hardball as it would mean that they should compensate for losses with other retailers”, Dayen wrote.

A similar dynamic took place during the shortages of supply chain after the cocovio pandemic, when the large grocery chains took advantage of the price disruption and impose more strict requirements on the suppliers, according to a federal commission of trade report.

Albertsons has thousands of locations, mainly in the west of the United States, and has brands such as Vons, Safeway, Acme, Shaws and Randalls. It is second in size only against Kroger. The two channels attempted a merger in 2022 which would have been the largest in industry history, but the 4.6 billion dollars agreement collapsed after several legal challenges.

This story was initially presented on Fortune.com