SQUEEZIN' THE CHARMIN
By Bill Saporito

(FORTUNE Magazine) – The trade war between supermarket operators and their suppliers is escalating. Winn-Dixie Stores, which has 1,240 supermarkets in 13 Sunbelt states, has stopped buying some of the top brand name items of Procter & Gamble, which produces Charmin and Citrus Hill orange juice among other things, to protest P&G's pricing policies. Other manufacturers include Quaker Oats (the Aunt Jemima line and Rice-A-Roni) and General Mills (Cheerios and Betty Crocker). The chain is challenging a longstanding practice among suppliers of charging different prices depending on the region, competition, and demand. Winn-Dixie is pressing for uniform national prices. At first, it might seem that the grocery chain was cutting off its arm to cure a hangnail. After all, who in his right mind would stop offering the products that customers look for first? A company struggling for better control of its bottom line, that's who. Over the past five years Winn-Dixie has watched its profitability slide. Competitors like Publix and Food Lion have landed on it like a fully loaded refrigerator. Earnings have been flat at about $116 million. The chain has won a partial victory. Quaker, which says it had plans to put various products on a one-price basis anyway, has agreed to speed up its timetable. Says Ron Bottrell, a Quaker spokesman: ''This doesn't mean across- the-board national trade deals on every single product we have.'' Meanwhile, P&G and others continue to negotiate. Winn-Dixie declines to discuss the matter.