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The Wall Street Journal reports that Kroger has decided to not move forward with "a controversial plan to charge alcohol suppliers for how it organizes beer, wine and liquor on store shelves."

Earlier this year, Kroger said that it "wanted the alcohol industry to pay quarterly fees based, in part, on volume to Southern Wine & Spirits, which would handle shelf planning for the supermarket chain," the Journal writes. "However, prohibition-era laws designed to discourage aggressive marketing of alcohol ban manufacturers from giving retailers anything of value.

"The Kroger plan met fierce opposition from alcohol producers who worried the fees would be illegal and costly. Craft brewers also expressed concerns that it would create a pay-to-play system that favored larger producers who could spend more on displays."

Now, Kroger says, it will hire P.L. Marketing "to help design shelving plans for alcohol brands." By hiring the marketing company itself, rather than using a distributor paid for by supplier funds, it avoids legal and regulatory problems.

And, the story says, Kroger plans to abandon the traditional "category captain" approach, using the marketing company to make decisions about shelf space and prominence that will based on traffic, sales and trends, rather than on promotional fees.
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