Birkenstock CEO slams Amazon's new buying program as an 'assault on decency'

Key Points
  • Amazon is rolling out a new program where it will buy products from third-party merchants, then sell them to consumers across the globe
  • Birkenstock CEO Dave Kahan says it's a 'pathetic' attempt by Amazon to create a backchannel means to sell products not offered on its site
  • This could turn into a bigger issue as Amazon is trying to control other brands' distribution strategy
Birkenstock CEO slams Amazon's new buying program as an 'assault on decency'

In a blistering email to its resellers, Birkenstock CEO Dave Kahan slammed Amazon's new inventory buying program, calling it an "assault on decency."

The email, which was obtained by The Washington Post, shows Kahan calling Amazon's latest act a "pathetic" attempt at creating a backchannel to sell products not currently approved for sold on its site.

"Amazon can't get Birkenstock by legitimate means so why not dangle a carrot in front of retailers who can make a quick buck," Kahan wrote in the email.

The issue at stake is a new program Amazon rolled out recently where it offered to buy products at full price from third-party merchants, then sell them to consumers across the globe. As CNBC reported last week, Amazon is approaching third party merchants who hold products made by brands that have declined to distribute through Amazon.

Amazon is leaving smaller retailers in the dust

Birkenstock, for example, stopped selling through Amazon last year, due to concerns over rising counterfeit products and unauthorized sellers. But Amazon has offered to buy Birkenstock products from other retailers so they can resell it on their own.

"I will state clearly, any Authorized retailer who may do this for even a single pair will be closed FOREVER. I repeat, FOREVER," Kahan wrote in the email.

This is the latest example of Amazon exerting its growing influence to grab a larger share of the market. By taking control of some of the brand's distribution process, Amazon is able to reach a bigger audience and even decide where a brand gets sold in the world, an unwelcome strategy for most manufacturers.

"This new initiative is going to cause significant headaches for brands - Amazon is putting itself in the position to decide a brand's global distribution strategy - hardly something a brand executive wants Amazon deciding," James Thomson, partner with Buy Box Experts told CNBC.

"And it's only a matter of time before brands challenge this in court, as brands aggressively protect their trademark both domestically and overseas," he said.

You can read the full email here.

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