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An open letter to the members of the New Zealand Food and Grocery Council

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Author Nick Hogendijk

30th July 2021

Dear NZFGC members,

I want to congratulate you on being heard by the Commerce Commission yesterday and to reiterate that we are in this with you for the long haul. We are not going anywhere until the Market Study Final Report is completed with the right outcomes for you the suppliers, the retailers & most importantly your loyal consumers.

That said I want to call out that in the last 24 hours Hexis Quadrant has been criticised for:

  1. Its relationship with the NZFGC
  2. For being “joined at the hip” with the FGC & in particular its CEO
  3. Working with the FGC when apparently the Board didn’t agree to us working with the NZFGC

Allegedly, senior executives in one retail business (I dare you to guess which one!) are privately seething at our, & in particular my, approach of calling them out for unacceptable behaviours. That’s ok, they will live, and if not perhaps a career change is in order.

So let’s clarify a few things…

When we first reached out to Katherine Rich as CEO of the NZFGC, it was because of ridiculous terms and conditions laid down by executives of Foodstuffs North Island.

While working with our clients to help navigate the minefield of LEAF 1.0 before (and then through the NZ COVID-19 lockdowns) we became increasingly concerned by FSNI’s attitude towards its struggling suppliers. Suppliers like you who were navigating the unprecedented conditions that this pandemic had created. The same pandemic that gifted a stranglehold on the New Zealand market to the two major grocery retailers.

Hot on the heels of LEAF 1.0, came Centralised Co-Op and all the “sportsmanship” that came with that process.

At this stage we offered free counsel to the NZFGC and its members such were our concerns. This was to ensure you, the members, were fully aware of the challenges ahead and the repercussions for those who didn’t get their preparation and approach right in these negotiations.

We didn’t do this for the blue chips like Unilever or Mars. We did it for you, the 1000’s of small to medium businesses that are the lifeblood of the New Zealand FMCG industry who employ thousands of people across the country fighting tooth and nail every day. You the Kiwi Battler.

We utilised our collective experiences as retailers, wholesalers, analysts and suppliers to ensure every visible angle was considered, and a few we didn’t see coming too! Again, to protect you, the Kiwi Battler.

Eventually the NZFGC Board and CEO asked us to conduct some work for you led by myself and David McAuley. A point seemingly forgotten by a few people this week. We reduced our rate, and a considerable amount of the work we conducted was done gratis as we understand the NZFGC is a not for profit and, like its members, the FGC was impacted by Covid-19. We did this for you, the Kiwi Battler.

We have spoken to many suppliers, interviewed several store owners and managers (not that they will tell you that publicly), and we have reviewed considerable amounts of content. All for you, the Kiwi Battler.

Yesterday justified it all. You the Kiwi Battler were heard. The Commerce Commission heard your collective voices and acknowledged you. The Kiwi Battler.

So, over the course of this week when I hear the criticisms raised towards me or us, it just makes yesterday’s announcement by the Commerce Commission worthwhile.

Hexis Quadrant are here to ensure you are heard. We are here to call out those who act inappropriately, coercively, or unfairly to undermine you, whether they are within your own team or external. Our range can’t be deleted, we don’t intimidate easily, and we are here for you, the lifeblood of the New Zealand FMCG industry. You the 1000’s of small to medium grocery suppliers who employ so many. You the Kiwi Battler.

Lastly, I heard a whisper that Foodstuffs North Island have now said “it’s war” today. If this indeed true then it saddens me that they still can’t read the room. It reminds me of Icarus who flew too close to the sun.

Knowing this, we want you to rest assured we will remain “joined at the hip” to Katherine Rich and the FGC Board. Our job is to ensure you are heard until you no longer need our support, or this journey is over. You the Kiwi Battler.

Sincerely,

Nick Hogendijk

Managing Partner