Kmart Seeks Court Order to Sell Alcohol

Feb 13, 2002

Kmart Corp. is seeking an emergency order from a bankruptcy judge so it can pay select companies that supply its stores with alcohol. Several liquor suppliers have stopped delivering to Kmart, according to recent court filings cited by The Detroit News. As many as 100 alcohol vendors may stop shipments within days.

Other vendors, including Sara Lee Corp., Pepsi bottlers and Frito-Lay Inc. say Kmart is dragging its feet on their outstanding bills and have asked the court to clarify when their debts will be settled.

Meanwhile, the Detroit Free Press reports that Kmart has been a major contributor
of unregulated soft money to political parties. Kmart gave $555,000 to parties
and their causes in the two years leading up to the November 2000 election,
and $175,000 to political party committees in 2001, including $50,000 to a Republican
fund-raiser in Washington attended by President Bush.

Moderator Comment: What are the most contentious issues
in trade relations today and what needs to be done to fix the way suppliers
and distributors do business with one another?

It has long been a contention by smaller chains and independents
that manufacturers give the large chains more flexibility when it comes to payment
terms. The small guys need to pay up if they want product but the large regional,
national and international retailers can pretty much determine terms as well
as special packaging, promotions, etc. Will the large CPG companies rethink
how they deal with chains based on the Kmart experience? [George
Anderson – Moderator

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