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How Canada’s Hostess and Old Dutch fought for potato chip market share

When Old Dutch Foods sent its chips east to the Ontario market, the chip-maker expected they would find buyers — but not that those buyers would be the competition.

But that’s what was happening in some cases in 1991, when Hostess Frito-Lay was buying up Old Dutch stock from store shelves.

“They offer to buy all of our product — at cost or at retail — and they tell [the stores] never to carry Old Dutch chips again and they’ll give them a better price,” explained Duncan McPhail, an Old Dutch salesman who spoke to CBC News in July of that year.

McPhail said the approach had been made at all 100 of the Ontario stores that he sold chips to.

The CBC’s Kelly Crowe reported on The National that Hostess admitted to having its salespeople buy up its competition’s stock “in some cases,” but a company executive said it had done so at the direction of the stores it was doing business with.

“In some of those situations, the retailer was keen for us to buy the product off the shelf, such that he could make better use of his shelf space,” said Hostess Frito-Lay President Jim Postl, when speaking with CBC News.

The Globe and Mail reported Hostess had been buying “entire stocks” of Old Dutch chips in the Toronto area for several months. The paper said the Winnipeg-based company had only started marketing its products in central Canada that year.

Read the full report and watch a video on CBC’s website here

Editor & Publisher: Lukie Pieterse

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