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Vendor Believes Market Basket May Be Trying to Sabotage Itself

Boston Sword & Tuna CEO says the way Market Basket has behaved amid drama has hurt his company, which shipped 30K pounds of salmon weekly to the supermarket chain

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    NEWSLETTERS

    Boston Sword & Tuna is ending its relationship with Market Basket, where it shipped 30,000 pounds of Norwegian salmon weekly, after the chain stopped accepting deliveries. (Published Monday, Aug 18, 2014)

    The head of a seafood supplier who says Market Basket overpaid his company by nearly half a million dollars is suggesting that the move may have been a deliberate effort by new management to sabotage the beleaguered grocery chain.

    Tim Malley, CEO of Boston Sword & Tuna, said in an open letter that the turmoil at Market Basket, kicked off by the ouster of longtime CEO Arthur T. Demoulas, has seriously hurt his company.

    The seafood wholesaler is cutting ties with Market Basket's current management group after a 10-year business relationship with the chain. Malley believes the company can save itself only by bringing back its fired workers.

    Market Basket has been roiled by employee protests, customer boycotts and near-empty stores for months, ever since a long-running boardroom family feud culminated in the June ouster of the man workers affectionately call Artie T. by allies of his cousin, Arthur S.

    Malley says that after he tried and failed for more than a week to reach executives who had promised to offset the costs, Market Basket gave his company two checks overpaying him by nearly $500,000, once by $83,000 and the second time by more than $415,000.

    "In my mind there could be only two answers to these accumulating mistakes and self-destructive strategies. One was that the CEOs were way over their heads," Malley wrote in the letter. "The only other explanation seemed to be a deliberate attempt to sabotage the future of the company."

    "Could the Arthur S. side of the family be so embittered by the defiance of Arthur T. and all the stakeholders supporting him that their plan is to sell him – at full pre-conflict price – a pile of smoking rubble?" he went on to wonder in his letter.

    According to Malley, Boston Sword & Tuna provided the supermarket chain with more than 30,000 pounds of Atlantic salmon weekly, as well as 15,000 to 30,000 pounds of other seafood. He says his company has a two-way contract with his partners who farm the salmon in Norway and with Market Basket.

    Without Market Basket buying the product, Malley said, Boston Sword & Tuna had to sell the fish at a significant discount and faced potential layoffs.

    "We're concerned about the inconsistencies with some of the statements and there's been inconsistencies with some of the financial arrangements. And we felt that we had an obligation to go public so that the shareholders, all the shareholders would know what's going on," Malley said.

    Malley said that Market Basket proposed that Boston Sword & Tuna provide one box of 10-20 pounds of seafood to each of the 71 stores Tuesday.

    "We didn't really see this as being a practical solution," Malley told NECN, adding that he wasn't sure they even had the staffing to distribute the product. "That's such a small amount that it makes us question their strategies and their priorities."

    While he believes the chances of Market Basket being saved are dwindling, Malley voiced his hope of a return to the way things were.

    "We've had such a good relationship with Market Basket. The former management treated us very well," said Malley. "We hope that they're restored to their positions and that we can all go forward, because we certainly do want to continue to do business with Market Basket."

    Market Basket's new management responded to Malley's letter Monday afternoon in a statement that blamed the employee walkouts for the damage.

    "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," they said. "We have been diligently working with vendors to limit the damage the walkout has caused."

    Market Basket employees and customers insist they're not backing down until Arthur T. Demoulas returns.

    NECN asked fired district supervisor Tom Trainor what would happen if ATD doesn't come back.

    "I haven't really thought that far ahead yet. We'll see what happens. I have full faith in Artie. And he said that he would never leave us. And I believe him," he said.