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Supermarkets threaten to boycott
Visa 19.05.2003 Major supermarkets are threatening to boycott Visa cards as the credit giant tries to raise its fees. Foodstuffs NZ and Progressive Enterprises, which control more than 90 per cent of New Zealand supermarkets, said yesterday that they were prepared to boycott Visa rather than pass on the fee increase to customers. One of the firms has given Visa a two-week ultimatum. Foodstuffs NZ owns the Pak'N'Save, New World and Write Price supermarkets. Progressive owns Woolworths, Foodtown, Price Chopper, Countdown and Big Fresh. The two firms, would not say what fee they currently paid, but confirmed it was lower than for most other retailers. Visa's proposed fee is thought to be around 1 per cent of each purchase. The supermarkets pay the fee whenever a customer uses the credit card at their checkouts. Figures supplied by Foodstuffs yesterday showed that supermarkets typically made $4 profit from every grocery purchase of $100. If the new fee was 1 per cent, then supermarkets would have to pay Visa $1 of that profit whenever a shopper paid with its card. Foodstuffs Auckland managing director Tony Carter said the new fee would slice 25 per cent from a supermarket's profit whenever a Visa card was used. The profit margin was too slim, and supermarkets would have to put up prices to cover the fee. Mr Carter said Visa was used in about 15 per cent of transactions. Progressive Enterprises managing director Ted van Arkel said his firm had given Visa until June 1 to change its mind. "Otherwise we will remove Visa." Visa International did not respond last night to inquiries from the Herald. Visa issues its cards through banks, which would not comment. Visa staff in New Zealand could not be reached last night. Original content can be
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