Screwing down cafes

admin

Don't know if anyone has seen the article in today's SMH about Vittoria taking a cafe to court because they terminated their contract with them early?

Does anyone know how prevalent this sort of arrangement is within the industry, and are all roasters equally nasty in enforcing their contracts?

-A

Gonzo

Would be interested to know who won, the big V, or the cafe. G.

Rob

I think its in the cafes favour,            my local roaster tells me all the time that he has local roasters, machine vendors, big companies, ie..fill in the space V

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   are trying to get him to sign contracts all the time.  He is a larger cafe and he feels he is in control. He is a good friend and as I am a coffee freak he loves to tell me the industry gossip. I am sure FC and other majors contributors/ roasters etc here can tell similar yarns. they offer him umbrellas, sugar, cups, uniforms, machines, and presents,    ie bottle of grange,     to sign up to them for 1, 2 or 3 years etc. he is always getting a FREE KILO  of some local roasters beans to try and says its very easy to be tempted every six months to change. As you may be aware, the more kilos of beans, and the more prominent, or COOL,  or visable location your cafe, restuarant is the better. He told me the big temptation is a new machine, flashier, etc....   San Remo showed him a lovely machine he wanted,  but he has to wait 6 months to get out of his current contract. I guess there isnt much loyalty,  or am i wrong there. I know pellegrinis in melbourne city has been with Vittoria for 30 years, which is amazing.  they do apparently 2000 cups a day in winter,  and that was a few years ago. the owners were both given a 2 group machine for home as a present for the loyalty.  I was impressed so maybe vittoria were screwed over for a greedy owner/   i dont know ??   I am sure others have similar stories/ or it just the area I am in.   Melbourne Inner city. ryan.

lars

Is this a sign of something bigger - the end of 'Free on Loan' cafe machines? Don't tell me: cafes will actually stock coffee based on the quality of a roaster's product, not the number of freebies they get! lars :o

Gonzo

Re: "...I guess there isnt much loyalty,

Unknown

Who ever is wrong in this case... whats the point of keeping unhappy customers? In the article, were told customers told the cafe proprietor, that the coffee was not up to scratch. Maybe the supplier in question should try to learn from this and look towards their product and/or service quality to find the answers to this one. I do doubt however that the supplier would go to the extent of legal action if there werent sufficient grounds.

Gonzo

Re: Who ever is wrong in this case... whats the point of keeping unhappy customers?   You are correct but the customers arent usually "unhappy" in the way that you may be thinking.   They are usually made "unhappy" because they have a steady barrage of sleazy coffee reps continually coming around, offering all manner of presents in order to endear themselves (have you seen all the useless lever action or hydraulic tampers  sitting unused in cafe's...gee they make great presents), living literally on the clients doorstep everyday in some cases to build a rapor, and continually repeating the cliche over and over that the encumbent supplier for whatever reason, "is not looking after you", and that the grass will be alot greener, and you will pick up so much more custom by changing to this other brand / supplier. This goes on and on and on.   The customer on the other hand, doesnt have the balls to see through this, nor does he have the balls to tell the rep to pee off, because he is under contract for another xxxxx months or years, so the rep is wasting his time. At some point when the rep thinks he has built up enough of a "relationship" with the customer he zeros in for the kill, starting to give free (yes free) product, sometimnes for weeks on end, cutting off the necessity for the client to buy product from his contracted supplier. After that has greased the wheels a bit more, he suggests to the client that he can go ahead and break his contract with the encumbent, because its not water tight or never been proved in a court of law or whatever.   Some of the clients fall for it. Only time proves that the grass on the other side is no greener at all, and the rep's promises that the client would pick up heaps more business from changing to his superior coffee have been proved to be lies and more d**n lies, but by then the damage has been done. I have no respect either for the sleazy reps, nor for the unprofessional cafe owners who wont just tell the rep that they are under contract AND HAVE AN OBLIGATION, AND who sell their souls because they like being wooed by sleazy drop kicks. So in many cases I'm afraid, the client is made unhappy by the rep from the other company and he wasnt unhappy in the first place. Re: "In the article, were told customers told the cafe proprietor, that the coffee was not up to scratch" Yup this is a good one. In the main, the coffee drinking  public has no idea what they are drinking, often think bad coffee tastes good, and vice versa, and they have no way of discerning whether a truly bad cup of coffee is the fault of the beans, or the operator that brewed it and heated the milk which by the way, makes up atleast 3/4 of the total brew. This is the easiest excuse to fire at any coffee company, but actually, the greatest majority of bad brews are caused by operator mismanagement at the cafe end. Where is the expert opinion, because I can tell you, the general public does not constitute this (experet opinion). re: "Maybe the supplier in question should try to learn from this and look towards their product and/or service quality to find the answers to this one" That supplier is a very determined "game" player and will simply put their vast reseources to making sure their contracts are more watertight in the future...this wont have any bearing on the product / service. Re: "I do doubt however that the supplier would go to the extent of legal action if there werent sufficient grounds" Too right. Why do you think the new supplier went to the trouble of wooing this client and (I am assuming) actively encouraging the client to break a contract. Because of the size of the account to be gained. The question is, why do cafe clients allow themselves to be placed in the situation of ending up in leagl proceeding and court?  These shenanicans do nothing more than cause an incredible amount of grief and wasted time. We're all there to earn an income, not to get involved in useless time consuming emotional (getting involved in legal scraps is very emotional) and physically draining skirmishes on the sideleines. And last thought for the day: Have you stopped to consider that if the cafe client does end up in court over something like this, that he may well be demanding the new supplier (the one that caused the problem) back his case (money, resources, etc). So in reality you have the 2 suppliers fighting eachother but one is not prominent. Why would one supplier be fighting another to try and prove that coffee machine contracts dont hold water Seems a contradiction to me. G.

ausrs

the upshot is IF you sign a contract you ARE legally bound to adhere to the conditions of that contract ,doesnt matter what a 3rd party offers you cannot accept it (unless you want legal action taken against you ) sad but true fact ........people in general have no loyalty........coffee reps are paid to do their job which is to sell coffee and accessories to go with it ,as a cafe owner you have to sort through this mess AND be able to sleep at night (has to do with having morals ) If someone has broken a contract they kinda deserve what they get

admin

Hi Rs - kind of agree with you on honouring what you've signed up to, although my understanding is that many coffee companies are prepared, once they've got their 'money's worth' to let you go, although apparently not the big 'V'. I'm no lawyer, but I'm wondering if there's an overall question about these sort of contracts in the first place - i.e. if they tie a cafe owner in as they do, do they then constitute 'restraint of trade' - which would make the whole deal unenforceable?? Am wondering if these might be the sort of questions being discussed in the case, and if so, it should be a pretty interesting result. -A

FreshCoffee2

Hi Admin, yes as you have surmised it relates to how the contract is worded in relation to "restraint of trade". As I understand, you are not allowed to monopolise someone on the basis of complete exclusivity, or on the basis of "product" or some such thing. However as AusRs has pointed out that doesn't negate the responsibility of cafe people from honouring the agreements they make and may I add, whether the agreements are "strictly" legal from a trade practices act point of view or not. Regardz, FC.

ausrs

whether or not they are strictly legal doesnt matter unless someone tests it in a court of law (is corporate affairs interested ?) ,with that comes years of appeals and cross claims that the small operator cannot afford either in monetry or emotional terms main thing is that people(cafe owners) are aware that this can happen (and may well happen more in the future ),may make them a little more carefull when the next offer of a "rent free" machine is offered to them ,in legal terms ignorance of what is in the actual agreement is not an excuse to end an agreement on another point is it really restraint of trade ???? if you are offered a contract that says   "we will give you a machine IF you purchase ALL of your coffee from us " is that a restraint of trade or purely a financial transaction that was signed by a cafe owner ?????How does it become restraint of trade ??? btw i dont work in the wholesale coffee industry or sell machines .........i am learning to make coffee (and enjoying every minute of it  ;D......

Reschsmooth

I am not a lawyer, but, s47 of the TPA 1974: TRADE PRACTICES ACT 1974 - SECT 47 Exclusive dealing (1) Subject to this section, a corporation shall not, in trade or commerce, engage in the practice of exclusive dealing. (2) A corporation engages in the practice of exclusive dealing if the corporation: (a) supplies, or offers to supply, goods or services; (b) supplies, or offers to supply, goods or services at a particular price; or (c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation; on the condition that the person to whom the corporation supplies, or offers or proposes to supply, the goods or services or, if that person is a body corporate, a body corporate related to that body corporate: (d) will not, or will not except to a limited extent, acquire goods or services, or goods or services of a particular kind or description, directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; (e) will not, or will not except to a limited extent, re-supply goods or services, or goods or services of a particular kind or description, acquired directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; or (f) in the case where the corporation supplies or would supply goods or services, will not re-supply the goods or services to any person, or will not, or will not except to a limited extent, re-supply the goods or services: (i) to particular persons or classes of persons or to persons other than particular persons or classes of persons; or (ii) in particular places or classes of places or in places other than particular places or classes of places. Does this mean that a cafe can enter into a contract to supply a certain brand of coffee, as long as the contract does not specify that the cafe can only supply that brand of coffee? Any lawyers out there? Patrick

Matthew_White

The smart way to word it would be that the cafe would have to purchase a minimum amount of beans to keep the machine. Sure, they can buy beans from an outside source, but there's no point if the contract beans will then be wasted.

admin

Hi guys - results of the case - Vittoria won, and the cafe in question looks like having to pay around $60K plus interest for Cantarella's lost profits. In the end, it doesn't look like there was any issue over 'restraint of trade' or any such issues - the arguments seemed to have revolved around whether or not there was an actual contract, since the written one didn't have dates in it. Apparently the judge found that the cafe owners had verbally authorised the Vitt. rep to fill in the blank dates (for a 3 year term) after they had signed - therefore the contract was 'orally stipulated' The wording of the SMH article was interesting; they called it 'a warning to all cafes and coffee carts entering agreements with suppliers in exchange for equipment' - as i mentioned, there was no hint of restraint of trade (you would have expected the big V's lawyers to make sure their contracts were watertight). Interestingly also, in a footnote, although the cafe lost the case the judge stated 'there was some evidence concerning dissatisfaction at the quality or nature of the coffee'. Admin