After being reprimanded by the British Groceries Code Adjudicator over its treatment of suppliers, Tesco is making changes to the way it works with its fresh produce supply base by bringing in longer-term contracts.
Trade publication, Eurofruit has revealed that the company has already started to introduce these new contracts for a select group of its suppliers, which are known internally as Tesco Partners.
Tesco ultimately expects to have around 25 of these Partners worldwide, who will represent all of the supermarket’s mainstream fresh fruit and vegetable categories.
They will work under contracts that span from three to five years, which is expected to help them plan further ahead.
Darren Clough, Tesco’s fresh produce category director for the UK told Eurofruit, “We’re developing a programme where we will aim to give our strategic partners around the world three to five year commitments.”
“Clearly, we have to have a little bit of flexibility and we won’t do that with everybody, but we are developing a group of strategic Tesco partners – some big, some smaller – with whom we’re going to have a longer-term collaborative and strategic commitment.”
He added that, “We’re also trying to be more helpful around payment terms, cash-flow and vendor financing, which is all about trying to take our business relationships to a better, clearer place.”
Clough also told Eurofruit that Tesco has introduced a scorecard for suppliers, which are designed to measure their performance in terms of quality, value, innovation, service and even ethics.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Jenny Whelan. To subscribe to ESM: The European Supermarket Magazine, click here.
