Toy Manufacturers Express Concern Over New Fees Imposed by Walmart Canada

August 3, 2020 | Toy companies in Canada and the United States are expressing alarm over new fees announced by Walmart Canada. Effective September 14, Walmart Canada will begin applying an “infrastructure development fee” of 1.25 percent of the cost of goods purchased by Walmart and for products sold through Walmart.ca or its other e-commerce groups. Walmart Canada will apply an additional “e-commerce development fee” of 5 percent on all sales of products purchased by Walmart. These fees come on top of already negotiated and finalized vendor prices. 

“Our phone lines and email accounts started to buzz immediately with member anguish after this news was communicated to vendors,” said Steve Pasierb, president & CEO of The Toy Association. “While we are precluded by U.S. antitrust restrictions to organize a response by our members, to impose new fees that come in addition to already negotiated pricing without any form of recourse is deeply unfair to vendors struggling through a pandemic and smacks of an unfair trade practice.”

The Canadian Toy Association (CTA) is receiving feedback from members about the recent communication from Walmart Canada announcing new fees being imposed on the supplier community. 

Serge Micheli, CTA’s executive director, stated: “This is exactly the wrong thing to do and the worst time to do it. Canadian toy manufacturers have already had to navigate supply chain disruptions and all the additional costs associated with keeping their workplace safe. They have also already negotiated their pricing with Walmart Canada and cannot make the necessary adjustments to mitigate the unforeseen additional 6.25 percent fee.”

Micheli added: “With the COVID-19 pandemic changing consumers lives, the Canadian Toy Association’s manufacturers are providing families with products that perform an essential role in child development. Our members have done an incredible job in meeting the increased needs of consumers while dealing with all the obstacles that COVID-19 has placed in their way. Walmart Canada is now adding another obstacle at a time of great uncertainty.”