Questionable Buyer and Seller Practices

Foodservice business relationships change over time as the executive chef or buyer gets to know the foodservice distributor and suppliers' sales representatives. This leads to a better understanding of expectations and performance capabilities. 

One difficulty, from an ethical standpoint, is taking favors or gifts, starting with an exchange of pricing information about a competitor's product to more egregious and illegal practices. Nearly any favor carried to an extreme will create dependence between the buyer and sell, raising ethical concerns.

On the other hand, there are certain practices the buyer must avoid or they will wind up abusing their responsibility to their employer and profession. 

Caveat Emptor (let the “buyer” beware!)

1. Expensive trips paid by the distributor or seller
2. Lavish entertainment at the expense of the vendor
3. Cash or frequent gifts valued at more than $50 from suppliers
4. Misuse of the exchange of information
5. Conflicts of interest
6. Unfair buying decisions or bids
7. Misuse of the foodservice organization's buying power
8. Disclosure of company confidential information 

Every Buyer Is Tested

From the junior buyer to corporate CPO (Chief Procurement Officer), being offered gifts is the most common and most troublesome aspect of my profession.  During my time managing food purchasing for Fortune 200 companies we always had a strict no-gift policy because it prevents most salesmen's attempts to influence the buyers.  

I can still vividly recall my first week as an assistant buyer for American Airlines in NYC. I had just been promoted into food purchasing, and moved from the Long Island offices to the company’s headquarters.  But the longer commute and job promotion wasn't to be my only new experience. I was about to face a decision that would forever impact my foodservice-purchasing career.

Ted, the print salesman, had been “working” the account for years. It turns out that he had invited every new buyer to lunch at the infamous Gaslight Club on the upper-east side. During my own inaugural luncheon, the dining room was very dim (or maybe it was the atmosphere of the club's speakeasy heritage), and the all-female wait staff served just about everything rare.  

Somewhere between my first drink and the last of my veal osso-bucco Milanese, I went to the restroom. Upon my return, I found placed neatly under a fresh Bucardi and Coke four crisp C-Notes. In a way, my buying career flashed before my eyes: “Will this place me under obligation? Do I have to return this favor, and if so, how am I supposed to do it?” I sat silently with these thoughts for a moment, and then slowly pushed the hundred dollar bills to the middle of the table. Ted appeared almost as bewildered as I felt, hesitated but finally took the money off the table. Lunch was finished cordially.

My solitary cab ride back to the office in the Continental Can Building on Third Avenue seemed longer and slower than usual. But as I stepped onto the elevator, I checked my wallet - just the $14 that was supposed to stretch until payday. 

After sitting at my desk for about 40 minutes trying to analyze what happened at lunch, I made the decision to discuss it with my boss. "Jack, Ted took me to lunch today. He offered me cash. What should I do?" Slightly to my surprise, Jack's response was calm and casual. "Nothing to do," he shrugged. “He offers everyone money.”  

So I was introduced to this “business as usual” practice, but how I decided to handle it has influenced the rest of my 35-year career. Past rookies had kept silent; some perhaps even kept the money. I had mentioned this dark practice and by bringing it into the light, was given recognition and respect for doing so.

I never did make it back to the Gaslight Club, which is too bad … the food was pretty good.

To Higher Profits!  

Fred                                                                                                                                          

Fred Favole is Founder & President of Strategic Purchasing Services (SPS) a firm specializing in purchasing supply-chain outsourcing, new product development and distribution program warehouse audits. His contact info:  p: 912.634.0030 email: favole@gate.net. Follow his blog at https://purchasinginsights.blogspot.com