Tobacco

Out of Stock at RJR

Packaging issue keeps wholesalers and retailers from getting products

WINSTON-SALEM, N.C. -- The R.J. Reynolds Tobacco Co. is offering apologies and asking for patience from retailers as they work to resolve product stock issues that one retailer said could cost him as much as $90,000 by the time the problem is solved.

We're asking for [retailers'] patience and support as we work through the issue, David Howard, a spokesperson for RJR, told CSP Daily News. We certainly apologize to them. We don't want this problem either, and we certainly understand that any out-of-stock issue is an unacceptable issue for any company.

Howard said the problem relates to a recent change in software at RJR and a packaging supply shortage that tied the company's hands, leaving wholesalers and retailers out of stock of several RJR cigarette brands.

As you institute this kind of [computer] system, it's going to take some time, there's going to be some learning as people get used to the new system, Howard said. However, it actually wasn't as much about the new systems we had; it was more a material supply problem. We had a material supplier that didn't get materials to us fast enough. It's a packaging issue, really.

Howard added that between getting the packaging issue resolved and catching up on supply of other brands that are likely selling more readily in light of the shortages, it could be another two months before the supply chain is back to normal.

It is a very important issue, and we're dealing with our wholesale and retail customers because we certainly recognize that any out-of-stock situation is an unacceptable situation, and we're doing everything we can to rectify that situation, he said. As we continue to address all of this and everything that is going on as the ripple effect, we hope to have everything up to speed and completely at the levels that everybody needs within the next two months.

It's definitely going to affect our cigarette sales, Andrea Myers, vice president of marketing for Kocolene Marketing LLC, told CSP Daily News. Kocolene Marketing runs a chain of 26 Fast Max c-stores based in Seymour, Ind. The brands causing Fast Max the greatest grief? Doral and GPC.

Howard said the shortages have been happening intermittently and that this is not a national problem.

Regardless, a retailer on the East Coast said at the current rate of product shortages 40 cartons per store, on average, this past week another two months of the problem could lose him about $90,000 worth of business.

The one thing that makes me feel comfortable, though, is nobody is getting cigarettes [in this area], said the retailer, who spoke on the condition on anonymity. It's not just this distributor or that wholesaler; it's across the board. We've been calling around to some other sources we have for product and they don't have it.

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