Thursday, June 25, 2009
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posted by
Stacy Jackson
If you haven't already begun thinking about the decision handed down in April on the Feesers, Inc. v. Michael Foods, Inc. & Sodexho, Inc., you may want to start now. Not just start thinking about it, but reviewing with your legal department the ways you have been contracting/pricing. (By the way . . . this litigation started before Sodexo dropped the “h” from their name, thus the old-school spelling in the court documents).
The Feesers ruling is tough for some of us to wrap our minds around since there seem to be potentially precedent-setting implications on how we view competition and price discrimination in the foodservice industry. It’s also an important ruling that may change the way our ContractPro® users take advantage of potential risk-analyzing features.
I’m no lawyer nor do I have a law degree, but I have done some reading on the case. I can point you to some sources online to help you get background information, but ultimately you should seek your corporate counsel’s advisement on any changes to your contract management practices.
With that said, here are some case points directly from the
International Foodservice Distributors Association (IFDA) Decision Summary document dated June 10, 2009 (last accessed by this blogger on June 24, 2009):
- Foodservice management companies and foodservice distributors as competitors. See pages 1 – 8 (pretty much the entire document speaks to this concept throughout it’s pages)
- Robinson-Patman Act (RPA) liability and the supply chain (the fact that Sodexo does not purchase directly from Michael Foods was not determinative; Third Circuit Court and US District Court said that adding a link in the supply chain did not remove potential for RPA liability). See page 3.
- Pricing discrimination between foodservice management companies and distributors. See page 3.
- Methods of compliance under the District Court’s orders in this case. See page 4.
- Factual and legal background of the case. See pages 4 & 5.
- Feesers establishment of price discrimination. See pages 5 – 9.
After learning about the ruling and reading a bit more about the data weighed by the judge in making her ruling, we decided to outline several areas of the ContractPro solution and
Answers Systems' services that clients have at their disposal, which may help them understand gaps in compliance with the RPA. Currently ContractPro clients can . . .
- Track committed volume versus actual volume
- Record competitive information when pricing
- Analyze average pricing over a specified period to understand inconsistencies in contracting between distributors and foodservice management companies, as well as GPOs - or between any two entities that may be considered competitors, for that matter
- Archive and pull contracts and associated historical activity on contracts
- Call on dedicated business intelligence staff that can assist in development of special reporting required
In addition to these existing features and services, Answers Systems is beginning to engage our clients’ legal counsel to determine special reporting needs, dashboards, etc. In partnership with legal departments, we hope to help clients understand and monitor risk.
Current customers - if you haven't talked to your legal department about reporting they may need from the ContractPro solution, we encourage you to do so. Together you can discuss new reporting needs with your Answers Systems representative.
If you aren't a ContractPro user but would like to know more about how to gain access to these types of key metrics, please contact us to set up a demonstration.
ADDITIONAL READING:
Third Judicial Circuit website
"Private Injunctive Relief Under the Robinson-Patman Act" New York Law Journal, May 19, 2009
Food and Ag Antitrust Case Update: Feeser's v. Michael Foods
ID ACCESS, “Feesers Wins Price Discrimination Suit vs. Michael Foods, Sodexo”
Wednesday, May 27, 2009
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Post by Greg Hilton, CIO
Many years ago, I read a great book on problem solving and the art of “framing up” business problems. The book, The McKinsey Way, by Ethan M. Rasiel, is a peek into the problem-solving framework used by one of the world’s most successful business strategy-consulting firms, McKinsey & Company.
The Theme – Approach every business question with a structured framework for solving the question (Ex: How can I measure and management my contract relationships to make sure
Thursday, May 21, 2009
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Since 1986, Answers Systems has provided best–in-class trade promotion and compliance management solutions for leaders in the foodservice and hospitality industry. The ValuTrak(R) solution is one of the most efficient and effective tools available in the industry. This product is a service for multi-unit accounts that support management of supplier agreements via data acquisition, rebate management, price verification and compliance reporting.
FAST FACTS
On a yearly basis, Answers Systems’
Monday, May 11, 2009
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The Answers Systems Inc ContractPro Trade Management Application Release 4.0 has been approved for general user availability on the morning of Monday, May 11th, 2009. This release is an interim release intended to address several minor issues and to prepare for upcoming releases. Below are the details of the changes:
Friday, May 08, 2009
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If you attended the 2009 ContractPro® User Conference, you may remember that Answers Systems plans to roll out a service ticket process that will allow client users to enter service requests directly to Answers Systems without having to go through a Client Team Leader or Customer Service Rep. Phase One of this solution launched on April 16 for a few charter users. Over the next 60 – 90 days, we will be working with the rest of the Answers Systems’ client base to configure the service ticket port
Thursday, March 26, 2009
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Recently Jennifer Grumbling sat down with Shawn Cady to discuss the development of the ContractPro® AthenaSM reporting module, the next generation of trade performance management reporting from Answers Systems.
Remember that "Seinfeld" episode where George got in trouble for dipping his chip twice? People were really irritated that he double dipped. I think we find double dipping troublesome in the world of foodservice, too.
For those new to foodservice claim settlement - and those who accidentally wound up on this blog - double dipping, in this case, refers to foodservice operators that receive rebate payment on a purchase more than once.
Tuesday, February 10, 2009
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As you have probably figured out from the past two posts, Answers Systems is growing. Our growth is on several fronts: product enhancement, services, data volume, and headcount. Answers Systems has been sure to keep the hardware, networking, and infrastructure needs on par with this growth to ensure our ability to handle ever increasing complexity, data volume, and users.
Wednesday, February 11, 2009
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In a recent foodservice conference someone made a case that manufacturers’ expenditures toward the trade should be considered “investment” not “spend.” An executive with a very large food manufacturer made the statement . . . “Don’t try to kid yourselves, most of it is spend, not investment.”
Tuesday, February 24, 2009
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Last month ContractPro® v3.4 was released to the User Community. This release contains some exciting features that will truly enhance the overall user experience.