Illegal Slotting Fees

It has come to the attention of this office that some retail stores, particularly grocery stores, require a monetary payment to a customer or prospective customer in order to get your product into the store. In the past, this practice has been referred to as a “slotting fee” and is prohibited by the Colorado Milk Marketing Order (CMMO).

The purpose of this bulletin is to remind you of Section IV, Paragraph 1, titled “Indirect Discounting and Rebates” (pages 20 – 22) of the CMMO:

“The offering, granting, giving, leasing, or furnishing, directly or indirectly, of anything of value (other than milk or milk products offered for sale at the prices set forth on the schedule filed with the Commissioner), to a customer, a prospective customer or any purchaser of milk or milk products, by any handler, handler-distributor, distributor, or by an officer, agent, employee, any branch sales station, or subsidiary of a handler, handler-distributor, or by any person for whom a handler manufacturers milk or milk products under contract, is hereby prohibited.

The above prohibition includes, but is not restricted to, the following practices: Discounts or rebates (if not included in the schedules of prices filed by the handler, handler-distributor, or distributor as a discount or rebate or otherwise approved by the Commissioner), free services, free milk and/or milk products, or any other product or merchandise, free supplies, free equipment (except as provided in Section III, Paragraph 19), cooperative advertising, advertising allowances, seasonal holiday or other gifts to customers, or employees of customers, the granting of exceptional credit or the advancement of money or product, loans or endorsements, or guarantees of any nature,” …..

This office will be monitoring this situation and violations of the CMMO will result in legal action.

John C. Larson
Director
Colorado Milk Marketing Board

JCL:mml