Multiple local food and beverage vendors say they have been overpaid by Market Basket since business at the grocery chain fell into chaos earlier this summer. Some have cut off their business with the chain.
Boston.com reported Monday morning that seafood vendor Boston Sword & Tuna had decided to end its business relationship with Market Basket and was calling for the return of former management after receiving an overpayment of more than $400,000 from current Market Basket management. That was a “final straw” in a series of erratic payments from Market Basket that caused Boston Sword & Tuna to openly question the strategies of Market Basket management and the company’s board of directors. Boston Sword & Tuna later shared a statement further detailing the move on social media.
Five other vendors spoke with Boston.com Monday and Tuesday, saying they also have been overpaid by Market Basket in recent weeks.
Among them is another seafood vendor, New Hampshire-based Canobie Seafood, which claims to have received checks totaling more than $140,000 in overpayments. Owner Roy Lavoie tells Boston.com he is no longer interested in doing business with the company under its current management after 22 years of working with the company.
“I don’t think they know what they’re doing,” Lavoie said. “The only way I’d do business is if Arthur T. is back in.”
Boston.com asked Market Basket about the new vendors’ claims Monday afternoon. The company issued a statement through a spokesperson shortly thereafter, which challenged Lavoie’s notion and placed the blame for vendor issues on employees who walked off the job on July 18 in protest of the June firing of former CEO Arthur T. Demoulas. The walk-off kickstarted the process that brought the company’s operations to a standstill. The statement read:
When a distribution network set up over decades is shut down in one day it is naive to assume any company would not suffer. The longtime employees that ran Market Basket's buying and distribution system walked out on their jobs, their customers and their vendors on July 18. That is precisely the reason Market Basket's stores have had only limited perishable items in stock since. We do understand the problems that the shutdown of the distribution system has caused Market Basket's vendors who are caught in the middle of this situation. We have been diligently working with vendors to limit the damage the walkout has caused.
Market Basket fired several senior-level employees on July 20, citing their roles in helping to organize the walk-off and other protest efforts.
However, another vendor said the firing of those employees was what convinced him not to work with the company going forward. That vendor—Paul Hatziiliades, who also goes by Paul Hatz, of Watertown Greek specialty food company Extra Virgin Foods—said he was overpaid, to a much smaller degree, by more than $3,000. But the firings played a bigger role than payment issues in his decision to cut ties, Hatz said, because some of those employees were the people he had been closely working with since he began selling to Market Basket in 2011.
“When they threw out everybody I worked with, I decided I didn’t want to do business with them,” he said.
Hatz said he does about $2 million in sales to Market Basket each year.
Three other vendors spoke to Boston.com Monday and Tuesday, but did not want to publicly identify their companies because they are still doing business with Market Basket. Between the three of them, they said they have been overpaid by more than $250,000.
The vendors said the overpayments came from the same invoices being paid multiple times. Each vendor said they had never had a payment issue under previous management.