European Stars And Stripes (Newspaper) - February 7, 1988, Darmstadt, Hesse                                Supermodels am now charging food companies to display their  renting shelf space to the highest bidder Byth Ishmall new Yolk times Ith the Ever growing number of now Lood products. Super Mikols Are finding their Shell space increasingly valuable so valuable thai Tiey arc charging loot companies hundreds of millions of dollars a i or to the Chance to have choir pro ducks displayed. It can Cost a company $2 million 1o s3 million to a or i Lade stores across the country to Stock a new six ice. According la pc ill Jones. A vice president of Tho  group a promotion consulting service owned by Iho a c Nielsen company  s say Hal she Lees arc Cliff Rcd to cover the costs of blocking a now Pio Trucl and thai they do not exceed those costs. Never shul ass Iho payments which have risen rapidly in t to uial in Eai s. Are becoming a Point of dispute in the Tood Tiv Justry some manufacturers and Lood brokers also say thai consumes will pay More or Lood and so fewer Innodai products from Small Lood companies you might say it s blackmail but Iho supermarkets Honvo some Good common sense lot Dang ii said Jones. A consultant for both supermarkets and Lood manufacturers. There Are 3,000 now products a year to said Ond warehouses can become clogged with ipod urls that Are  the Krogst company said the payments from Manulauti Irons. Matted stalling allowances Are justified. Basally stoning allowances Are a reflection of the rapid proliferation of new products Sari Paul Bemish a spokesman Lor Krow which is the nation s largest supermarket Chain and is based in Cincinnati. The allowances Ara part of a shift in Lood marketing Hal has led food companies to spend a smaller share of their Pio Molion budgets on attracting Consumers and a larger Sharo on wooing supermarkets in rough payments Lor things like shared advertising and discounts on products. Although Matulac lures give supermarkets various incentives to buy i hair slab listed products the stalling allowances arc generally paid Only when a product is being introduced to a supermarket Chain or a Region the allowance is paid Lor a trial pc nod usually no More than in months. Some food companies like Campbell soup pay Many kinds of promotional funds to supermarkets bul Cluse to pay Iho stalling allowances. For Consumers lha danger is thai some supermarkets will in effect rent space to the highest Biddi resulting in higher paces and Lewes choices. Tho system could make in Dell cull for innovative Small companies 1o move Tho if products to the Market. By  insist Hal they will carry unusual products without charge because Thuy know they will make Money on Idem if the product is going Loba a Winner then we have to Lake in Oaid Robert Wunderle a spokesman Lor supermarkets general. Us path Mark stores take about 10 percent of the new products offered to them each year he said the various promotion allowances Are Only one of the factors considered in deciding whether to take a new item he said. Nevertheless the existence of the payments deters some Small companies from even frying to set through conventional supermarket channels entrepreneurs May Soma find alternatives. One of them Vilari inc a company in Scarsdale. . Has just begun Selling its Frozen fruit dessert in machines Hal it has installed in several supermarkets in new Yolk City. Vilari considered pulling the dessert in store freeze cases but could not afford the slotting allowances. We looked Inlo it arid decided hat was not the Way logo said Jeffrey Krulwich. The senior vice president it just seemed like an Enlora Ordinary  he declined to Spe Eity How much the supermarkets wanted. Food Industry executives say there is nothing illegal about Iho practice although they also note that it will Pio Batty not be Lesley in court because manufacturers have no desire to sue their customers the supermarkets. Legal experts Loo say that even if the practice is questionable in is so Only in certain circumstances. The Only thing lha could be wrong would be if Iho Siloro had a lock on the Market said Steven Salop an  expert who is a professor of Law and economics Al the Georgetown University Law Center in Washington any lest of the practice would probably come under the Robinson Palman act. A Tow pertaining to sup Smarkel pricing that has nil been vigorously enforced in recent years. Food companies Conceda that the rapid increase in new prot urls Lias made decisions Lough Lor supermarkets but they argue Hal stores should charge Only whal it costs to get a now product Inlo the warehouse and into Ihbe store s inventory system. What they protest arc allowances that exceed those coils some of those being asked arc out of line said j m Keller director of Trade relations at general foods and Somo manufacturers Are dumb enough to say  Tho retailers have gone overboard and Are looking Al this As a new prolix Center said Frank Dell. Iho vice president of Cresap. O division of towers Perrin inc. In new York. Tho division is a consultant to super Markels and food companies he estimated i hat it costs a Chain of 10 stores about is ,500 to put a new Rolern Inlo its system. But Hal the amounts demanded from manufacturers Are sometimes tar More. In some northeastern Olios food manufacturers and brokers say it can Cost  to got a now product into a supermarket Chain for a six month trial. Sup Smarkel Osti vials deny that they charge Moro than it actually costs them to put a new product Inlo the system. The slotting allowance is not n net Pioli Generator said Wunderle of pal Hmark. Because figures on Sld Ling allowances Are not made Public even by publicly owned companies it is impossible to verify assertions by food manufacturers and consultants thai the tees exceed the costs. The Money that manufacturer ate tunnelling to. Supermarkets reflects a Signil cant change in Iho Way food is sold in the United Stales. Ii used to be thai lha manufacturers held All the cards said James Moron a spokesman Lor Campbell soup. Now the supermarkets Are becoming More powerful and . They own lha  super Makoti have enhanced their Power partly through computers which lot them track what Sells and does not. They con quickly get rid of products thai Are not moving fast enough. Because of this Shuji in Power manufacturer Are spending a much Grealer Pyrc Enago of their promotion budgets on supermarkets than on Consumers. Richard Furash a partner in the Boston retail unit of Toucho Ross � company an accounting Lorrn said that in 1973 Lood manufacturers spent 75 percent of their promotion and advertising budget on Consumers and 25 percent on supermarkets today thai proportion is nearly reversed with 70 percent going to the supermarkets and 30 percent to the Consumers. Other consultants have Del front numbers but All agree Hal promotion to the Trade is growing. In 1986, according to Flobell Schmitz. A vice president of the Summa group food Matulac lures spent $ 15,3 Tillion on consumer promotions excluding advertising and s19.3 billion on promotions to Superman kiss. Like new product allowances disco Rili and funds Lor store advertising. The latter amount is far larger than the supermarket Inu a sly s Overall net prolix of $3 billion to 14 billion last year he said while there Ere no data on whether the stalling allowances add so what the consumer pays Lor food one consequence May be diminished choices. Gus psyches president of m. & h. Brokhage inc. In White Plains. ., said Small and medium sized companies Are finding in particularly difficult to get new products into now York oly. Some Are electing to slay out he said with the Money it costs to get into the new York Market they can gel Inlo four or Frau  a added that although manufacturers Ara complaining Abou the slotting allowances in was manufacturers who a lartaud of i a them a Lew years ago when Competition among new products began intensifying. They did it because of their anxiety to do business he said. All you need