• Bullied by a Monopoly: GS1

    by  • June 7, 2012 • Human Resources, Leadership, Marketing, Strategy

    blackbearA long time ago, I’d bought some jam and fruit syrup from British Columbia’s Okanagan Valley. The quality of the product was outstanding. The branding wasn’t nearly as good. So I approached the maker and negotiated a deal whereby they would produce for me under a brand that I would create for a niche market – the tourist and gourmet trade. To make a long story short, I created a little business under The Black Bear Fruit Company brand name. But due to other interests and priorities in my life, I didn’t work at developing this business, so it became a hobby.

    I handed the line over to a specialty food distributor, even though this is often the kiss of death; distributors are better at order-taking than selling. Nonetheless, the one representing Black Bear continued to take orders for almost 20 years. During that time, a company known as GS1 was formed under the auspices of regulating product bar codes. Well, I already had a bar code; now I was told that I had to join this organization and pay annually or my products would no longer be handled by chain retailers. I soon learned that I had no option. In Canada, GS1 is a monopoly. Black Bear qualified for the smallest company rate, at the time, $695.00 per year. I paid it, and kept paying the annual fee until November of last year when I decided to wind down The Black Bear Fruit Company.

    I notified GS1 that I no longer required their member services. I discovered that this is analogous to a small merchant telling the Mafia they no longer require protection services. For months GS1 hounded me for renewal fees. I’ve had calls from collection agencies. I told them that I was no longer a member. Yet, GS1 is undeterred. They finally informed me that an administrative fee of $150 + tax would be charged for terminating my account. Imagine an organization like Costco pulling an act like that on members who chose not to renew. The notion is preposterous. Companies in competitive environments don’t bully; they know their customers have choices. This is not the GS1 mindset.

    I told GS1 to stuff their cancellation fee. Their response: “By not paying to release your membership unfortunately you will continue to have collections calls or emails.” Looks to me like GS1’s employees are also unimpressed. Check out this link – http://www.glassdoor.com/Reviews/GS1-Canada-Reviews-E453611.htm 

    Stay tuned.

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    Formerlife: Jacobs Suchard CEO (Kraft, Nabob), Strategy Consultant. Afterlife: Palgrave Macmillan Author, Historical Novelist, Business Journalist

    2 Responses to Bullied by a Monopoly: GS1

    1. June 10, 2012 at 5:19 am

      I presume GS1 is a not-for-profit, or at least an association-like setup designed to serve the industry. Like most of these organizations they operate in a vacuum and are not model of business efficiency. They often lack strategy (instead, do more of what we did last year + 5% budget increase). Doubtless they have a passive board.

      John, I recommend you invest a little time in finding the board chair and offer your consulting services.

    2. John
      June 10, 2012 at 8:29 am

      Thanks for stopping by, Alan. I spent 10 seconds looking at that “passive” Board – mainly composed of big retailers and manufacturers and members of GS1 management. They are not the kind of folks who’ll give a damn for the small guy.