Too Many Boxes

A food company had one of its major lines deleted; as a result they had an excess of packaging material.  The packaging was in perfect condition, however the price paid in the secondary retail markets for products of this kind was not sufficient to warrant the company going into production to fill the packaging.  The financial impact of destroying the packaging was considerable.

Active International and the food company established targets that needed to be met to commence production.  Having confirmed the resale price for the finished product, Active International paid the food company their Cost Of Goods Sold plus a healthy margin, with a combination of cash and trade credit.

In return, the company has committed to purchase an agreed proportion of their media advertising over a two-year period, and concurrently part pays for their casual labour with trade credits.