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Birkenstock CEO Accuses Amazon Of "Modern Day Piracy"

President Donald Trump might’ve been on to something when he accused the Washington Post of being a “lobbyist weapon For Amazon.”

In a rambling five-page email published by WaPo, the CEO of Birkenstock USA threatened to cut off authorized retailers who sell even a “single pair” of its shoes to Amazon.com Inc., a continuation of his crusade against the online retailer, which began about a year ago when he demanded that the e-commerce powerhouse do more to ferret out fakes being sold on its platform. In the missive, CEO David Kahan blasted Amazon for soliciting Birkenstock retailers, offering to buy the company’s shoes from them for full price. Birkenstock stopped selling its shoes on Amazon earlier this year, citing a rise in counterfeit products and unauthorized sellers.

Though the paper disclosed its conflict of interest, the story was obviously intended to embarrass a business rival of WaPo owner and Amazon founder Jeff Bezos, despite the paper’s smoothly neutral tone.

“In the email, Kahan called the entreaty a “desperate act” and a “PERSONAL AFFRONT.”

 

“Birkenstock does NOT sell [to] Amazon,” he wrote in the email to retail partners. “And it is clear that they are seeking back-channel means by which to obtain our brand.”

 

He emphasized that the German shoemaker prohibits shop owners from selling, distributing or shipping its products to resellers.

 

“I will state clearly, any authorized retailer who may do this for even a single pair will be closed FOREVER,” Kahan wrote. “I repeat, FOREVER.”

Kahan added that he is considering legal action against Amazon.com for ‘knowingly encouraging a breach of our policy.’”

Birkenstock doesn’t allow unauthorized resellers like Amazon to sell its classic cork-and-leather sandals, believing that losing control of it products risks tarnishing its brand and reputation. Kahan also noted that, by cooperating with Amazon, the company risks losing control of how and where its products are sold.

Later in the lengthy missive, Kahan claimed that Amazon’s inability to weed out fakes is tantamount to encouraging piracy.

“'This is modern-day piracy on the high seas,” Kahan said in an interview. “This is a middle finger to all brands, not just Birkenstock.”

At least one Birkenstock retailer interviewed by WaPo said he supports Kahan’s decision to cut off Amazon, saying sales of the company’s shoes have risen about 20% over the past year.

“At Martin’s Family Shoes in Gettysburg, Pa., owner John Fidler says sales of Birkenstocks are up about 20 percent this year, which he attributes at least partly to the company’s split with Amazon. He was encouraged, he said, to receive Kahan’s “ticked off” email last week.

 

‘It was great that somebody finally put Amazon in its place,” he said. “I don’t see any reason to sell there.’”

Even though Amazon declined to comment about Kahan’s email specifically, it’s clear why the firm might consider his anti-counterfeit campaign a threat to its ambitions to keep expanding. As WaPo noted, Kahan’s decision to stop cooperating with Amazon could inspire other retailers to withhold their product from the platform, as brick-and-mortar retailers struggle to survive as consumers increasingly prefer to shop online.

Amazon is fighting battles on multiple fronts as it struggles to expand: Wal-Mart recently warned trucking firms that it would drop its business if it found out they were also moving goods for Amazon. Meanwhile, its deal to purchase Whole Foods Market is in danger of being scuttled by Congressional Democrats, who are falling for the FTC to investigate the company for possible antitrust violations.

Read the letter in its entirety below:

Amazon Retailer Letter 7.20.17 by zerohedge on Scribd