For almost 20 years, Vince Forgione sold his Lisa’s Gourmet salad dressings to Loblaw’s. This week, he made his last shipment ever to the grocery giant after being told his wares were no longer needed.

“It’s one of the better dressings out there, and that’s why we carry it. I really like their Caesar,” said Sebastian Maier, manager of the Avenue Rd. location of Bruno’s Fine Foods, a six-store chain that continues to sell Lisa’s. Maier said his store sells at least three cases (30 bottles) a week. He said it sells less volume than Renee’s Gourmet salad dressing but that is because Renee’s is better known.

Forgione, who wonders how his Concord-based business will survive after losing a client which accounted for more than 90 per cent of his sales, says he was told in late November by Loblaw Cos. Ltd. that “there’s no more room in the fridge.”

He suspects he was squeezed out because the company preferred to give more shelf-space to Renee’s, which since 2006 has been owned by deep-pocketed food behemoth H.J. Heinz Co.

“I can’t afford to pay the listing fees that a big company like that can. No small business can,” said Forgione. “It’s not about the quality of the product any more. It’s about how much money you can bring to the table,” he alleged.

Listing fees are a charge suppliers pay to retailers to assure their product space on store shelves.

Lisa’s experience appears to be a much smaller scale version of Cott Corp.’s painful experience when it was told in 2008 it was losing the contract to produce store-brand soda for retail giant Wal-Mart. Cott’s stock tumbled after it lost its biggest customer, and the company was forced by activist shareholders to cut costs and restructure its business.

A spokesperson for Loblaw’s refused to discuss listings fees, but said they had nothing to do with the decision to ditch Lisa’s. Instead, it was simply a matter of keeping up with the changing tastes of consumers, said Loblaw spokesperson Julija Hunter.

“Consumers are asking for different things in this category now. They’re looking for yogurt-based dressings, lighter dressings. We’ve tried to address this with the company as a partner for three or four years. ‘How can we work together as partners on addressing this?’ And unfortunately, some of these issues haven’t been addressed by the supplier,” said Hunter.

She added that Loblaw prefers to go with local suppliers wherever possible, and pointed to the company’s recent decision to increase its supply of Ontario-raised beef, as an example.

Forgione, who together with his son has two full-time employees and three part-timers, says he’s been more than willing to adapt, and has in fact developed several new products, including a new line of vinaigrettes.

“Everybody liked our dressing. It sold well, it was priced well, and we were always looking for new kinds,” said Forgione.

He added that he had roughly $3.5 million in sales a year through Loblaw’s.

“I’m not trying to rip Loblaw’s. I made a lot of money with them over the years,” said Forgione.

Industry analysts say listing fees are an increasingly large part of the business model for all grocery chains and many other kinds of retailers, and it’s something which makes it hard for smaller suppliers to get on the shelves.

Retail industry spokespeople disagree and say the practice doesn’t determine what goes on the shelf. Popular products will always find shelf space, the say.

“It restricts smaller companies from getting on the shelf,” said Ken Hardy, a professor emeritus of marketing at the University of Western Ontario’s Ivey School of Business.

“When the Loblaw’s of the world charge for self space, large suppliers are always going to have an advantage over small suppliers,” agreed Satinder Chera, Ontario vice-president of the Canadian Federation of Independent Business.

So why are retailers doing it? It’s good money, and they need to keep up with the Joneses, says Hardy.

In an environment where Loblaw is competing with other retailers such as Sobey’s and Metro, if one company’s doing it, the others have to, just to keep up their bottom lines.

“All retailers look at what their profit is from each stock keeping unit (SKU), and the listing fee is a part of it,” said Hardy.

Part of what drives retailers to extract every bit of revenue they can is that customers are increasingly looking for bargains, Hardy says. With profit margins on products getting tighter, that means companies have to look elsewhere to make up the profit slack.

“It starts with the end customers who stock up on all the big deals,” said Hardy.

One Canadian retail industry stock analyst said the listing fees are forming a greater portion of retailers’ profits than ever before.

“It’s not the majority of their profits, but it’s significant. But you’ll never find it because they don’t break it out,” said the analyst.

An executive with the Retail Council of Canada trade association said listing fees don’t have any bearing on what’s listed on store shelves.

“To suggest it’s anything other than consumer demand . . . is simply wrong,” said Dave Wilkes, the RCC’s senior vice-president (grocery).

As far as what Forgione’s up to now that he’s lost over 90 per cent of his revenue, he’s shipping dressing to his few remaining customers such as Bruno’s Fine Foods, but says it’s tough to replace a customer as big as Loblaw.

“I’ve tried with some other places, but it’s the same kind of story. And you just can’t replace something so big,” said Forgione.