Rumblings in Canada’s grocery elite: Sobeys franchisees go independent

July 20, 2009

CFIGPeterKnipfelCFIGlogoWikidFranchise.org often adds depth and perspective to a current media franchise industry article.

Let’s take a look at the decades-old, but next to invisible, war of wills within Ontario’s grocery industry.

Last week, the Canadian Broadcasting Corporation reported that Buy-local push prompts Ontario grocers to go independent.

The Toronto Star ran a story last Saturday called Meat cleaves grocer’s tie to Sobeys: Ex-franchisee goes independent to gain right to sell beef, pork, poultry produced locally about 5 Sobeys franchisees taking themselves independent in southwestern Ontario.

That doesn’t seem to be much of a story unless you start looking into the background of the franchisees involved. The current press spin (a desire for more local suppliers) is certainly not the whole story.

In the CBC story a Mr. Peter Knipfel is quoted as saying:

“We actually put it [franchisor non-authorized products] on our shelves because we felt it very necessary for it to be in our community, and that prompted that we get away from the franchise system, because it was not making them [Sobeys] happy,” Knipfel says. “I didn’t want to ruffle any more feathers, so we just decided to part company.”

Grocery franchisors in Canada ruthlessly control what products can and cannot be purchased in their franchisees’ stores. Vendor programs (rebates, kickbacks, allowances) are a very important source of income for Big Grocery in Canada.

WikidFranchiseWhen you search WikidFranchise.org for “Peter Knipfel” you get the following article: CFIG Public Hearing Testimony. It appears that Knipfel was the Chairman of the Board of the Canadian Federation of Independent Grocers in 2000.

He is quoted as their Chairman in 2000 as saying:

…With the consolidation today in the grocery industry and the control that the franchisor has over the franchisee as far as pricing and our profitability is concerned, we need some protection for some fair dealing with our franchisor…

Sure enough, when you hop over to the CFIG’s website Knipfel’s photograph (see above) is prominently displayed as the Feature Story scroll.

That a former Chairman of the CFIG is one of the defecting franchisees is an indication that this story has much more to it than the simple formation a group called the Independent Hometown Grocers Co-Op.

I created WikidFranchise to help non-insiders understand the hidden meanings within franchising.


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