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Wholesale Food Service Contract

Resolution of conflicts between distributors and suppliers on the wholesale food service market

 

STUDENT PAPER

By Mikael Aboudarham

SKEMA Business School

Paris, France

 



ABSTRACT

The wholesale food industry is one of the heaviest industrial sectors worldwide. It employs thousands of people and is responsible for the safety and well-being of billions of people. Within this industry, one chore relation is the one between suppliers and distributors. Since years now, the overall climate has fostered tension and conflicts, with issues of payment, delays and non-respect of mutual agreement between the different parties. From established contract to mediation and even arbitration, resolution of conflicts must ensure efficiency. Lack of understanding of the special needs of each part is a reason to conduct an analysis and comparison in order to understand what needs to be done to improve the relation between two main actors of the wholesale food service market. To ensure that, the following report focuses on five different alternatives which are contracts that are all different at their basis. The author analyses each contract thanks to a process that allows clear understanding of advantages and disadvantage, in order to select a preferred alternative to resolve conflict between suppliers and distributors.

Key Words: Conflict, Dispute, Default, Claim, Resolution

INTRODUCTION

Food industry is a wide area, generating more than 172 billion euros in France, with more than 17 647 companies sharing the market. This industry is the most important one in France in terms of revenues, employment, R&D and many actors with their own working ways are composing it. Because of the singular specificities of each company in this sector, this paper will be focused on the wholesale food service contracts, from the producer to the retailer, a common document for each relation between these parties.

The current situation in the Food Industry highlights many difficulties from the producers’ point of view, especially concerning their relationships with retailers, who gain more and more power through years. Because of these evolving relations, consequences may appear between the partners; conflicts may occur and need to be solved before any negative repercussions on the relation, on the final customer. Indeed, in the current French market, more and more retailers have the status of big multinationals or even conglomerates, and use their power in order to manage the payment’s delay. In wholesale food service contract, this is called a Default, a growing trend within the French food industry which is the major source of dispute between the both parties and should be efficiently resolved.

Are there some methods to solve conflicts between distributors and suppliers? How do they work? What are the parties’ responsibilities in this kind of situation? What are the possible consequences? What tools should be used? Although the use of food service contracts between parties and the possible intervention of the government to manage this kind of situation, the resolution methods seem unclear, without a real viability. And this situation may concern each actor of this market and have consequences on final consumers, reasons why it should be understood by all.

Objective Statement of the project

Through this report will be analyzed what is an original food service contract, and its role in case of dispute between distributor and supplier in food industry to understand the used methods to resolve it. In order to analyze it, an original food service contract will be compared to 4 types of contract that are most used: FIDIC, Consensus, EJCDC and AIA to demonstrate its viability and feasible alternatives to face this kind of issue through the MADM methodology which allows to show both qualitative and quantitative research.

The objective of this report is to focus on solutions to change the initial relationship between producers and retailers and to resolve conflicts between them as well. Since a long time now, the climate is tense between parties. So, it’s important to put in light all the issues and create some recommendation bases on assumptions and research. As a future member of the food industry, my major concern is to help my colleagues to create a better understanding of the market needs and reduce the degree of dissatisfaction within an industry in transformation.

We will answer the following questions: What are the current issues regarding the relation between supplier and distributor in the wholesale food service market that creates conflict? How can we determine which alternative would work and avoid dispute claim?

More…

To read entire paper, click here

 

 Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Aboudarham, M. (2018). Wholesale Food Service Contract: Resolution of conflicts between distributors and suppliers on the wholesale food service market, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Aboudarham-wholesale-food-service-contract-student-paper.pdf



About the Author


Mikael Aboudarham

Paris, France

 

 



My name is Mikael Aboudarham. I am a 24 year old French student at SKEMA Business school. I am currently following the Msc in Project and program management & Business development (Msc PPMBD) which is one of the best ranked Msc in the world. I’m a former student of the Fundacao Dom Cabral in Belo Horizonte in Brazil and also in Coventry University in UK. I also got a bachelor degree in sport management in 2016. I consider myself as an optimistic person, always looking for ways to improve my performances and my relation with people. I’m also very sociable and like to exchange with other people. This is for me the best way of learning, listening to people with previous experience.

My professional background relates mostly in sales and business development. I had previous internship in Ferrero as area sales manager. I also worked for Mercedes Benz as assistant customer relations. I had opportunity to manage teams, take responsibilities and develop the sales of every company I worked with. Regarding project management, I count one main experience in the sport sector. I worked as an assistant project manager for the league of Tennis in Paris. The main purpose of this work experience was to put in place an international tournament of tennis, with players ranked from 300 to top 100 in the world.

Within the associative world, I also have some experience as project manager. I worked with Amaury Sport Organization (ASO) for very big events such as the « Marathon de Paris » which counts more than 40,000 participants, or even the ‘Challenge du Monde des Grande Ecoles’ which is a competition gathering students from all French business schools.

All those big events helped me to develop my skills and competence for project management, and I am looking forward to developing it thanks to the new challenge that I have embraced. From January 2018, I work in a new internship as brand manager in a great FMCG company, where I am developing my knowledge in a new industry for me. This is part of my will to learn the maximum in order to leave SKEMA business school with a toolbox as complete as possible.

I am currently living in Paris and can be contacted at [email protected]