Today’s Top Supply Chain and Logistics News From WSJ

February 23, 2016

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SUPPLY CHAIN STRATEGIES

 

Authorities in France are investigating whether one of the country’s largest retailers unfairly squeezed its suppliers amid the tough competition among French retailers. The investigation is the second in recent months in the European Union involving big buyers and their suppliers, highlighting the critical role sourcing and suppliers play in the competitive retail trade. In France, antifraud investigators searched the offices of Carrefour SA as part of a probe of allegations that the retailer unfairly squeezed suppliers to lower prices, the WSJ’s Nick Kostov reports. Several suppliers say the hypermarket chain demanded they effectively lower the prices of goods as a precondition to entering price negotiations. Just last month, regulators in the U.K. said supermarket chain Tesco PLC breached a code of practices by unfairly delaying payments to suppliers.

 

The livestock supply chain in the U.S. is getting more centralized. A new law signed by Nebraska’s governor ends one of the country’s last state bans on meatpacking companies owning hogs, the WSJ’s Kelsey Gee reports. Critics say the action will extend the power that processing companies hold over farmers and livestock markets, adding to the debates in Farm Belt states over control of markets and distribution channels. Independent farmers argue they are being squeezed out, and that streamlining supply chains is really aimed at undermining competition and undercutting prices. Those supply chains are becoming global, however, and the battle over the Nebraska law was a sign of that: among its big backers was Smithfield Foods Inc., the Virginia business that is now a unit of WH Group Ltd. in China.

 

Chinese trade is starting 2016 on a slow note. Exports fell 11.2% year-over-year in January, following a drop of 1.4% in December, and imports plummeted 18.8% , the WSJ’s Mark Magnier reports, declines that came even before the traditional shutdown of factories for this month’s Lunar New Year celebrations. The figures are a disappointment to logistics businesses in the U.S. and Europe that are looking for signs of China a turnaround that would push more goods through distribution channels. Instead, China is signaling that its efforts to boost the economy are growing more urgent. The country’s central bank last month quietly rehitched the value of the yuan to the dollar, the WSJ’s Lingling Wei and Carolyn Cui report, leading to the biggest jump of the Chinese currency against the dollar in more than a decade on Monday.

 

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