JTI Ireland, which is scheduled to close around 600 accounts with retailers across Ireland next week, has told Retail Intelligence that it still intends to offer support mechanisms to affected retailers and keep them abreast of the latest developments in the trade.
Last month, JTI issued letters to around 600 of its customers, notifying them that a number of direct accounts that either 'purchase low volumes' or 'do not order in a consistent manner', will be closed on August 15.
The minimum threshold for maintaining a direct account with JTI is understood to be 140,000 cigarettes per annum, or 700 cartons, regardless of location or size of outlet.
Following this announcement, JTI Ireland sales director Derek Mooney told Retail Intelligence that the tobacco company hasn't reduced its sales force, and that its sales team will "still be calling to those outlets, albeit less frequently; keeping them informed on issues such as Show Me ID, plain packaging and other initiatives that are coming to the market."
He added that the company "didn't take the decision lightly. We've managed to keep the account base open for a considerable period of time - our competitors closed quite a number of accounts over the past two years, whereas we have been able to keep them open. But the time has come to say that it's impractical for us to call to some of the outlets that are ordering small quantities."
Responding to comments from the CSNA, which suggested that retailers affected by the account closures will 'lose' part of their margin on tobacco sales, Mooney said that he was confident that retailers will be able to source appropriate 'deals' from cash and carries. "Retailers are not going to be charged cost plus 4%, as has been suggested," he said.
Following the closure, JTI will continue to offer a full direct service to around 3,000 accounts. JTI recommends that symbol group retailers affected by the closures contact their head office for advice.
© 2014 - Checkout Magazine by Stephen Wynne-Jones
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