Tesco looks to support local suppliers

Competition

Amid persistent, if long-denied, rumors that it plans to quit the Hungarian market, and with a minister this summer accusing multinationals of “dumping Europe’s food industry rubbish on Hungary,” supermarket chain Tesco says it wishes to strengthen support for its suppliers across the region, it emerged from a Tesco suppliers conference in Kraków on September 7.

The British-based retailer says it will focus on creating a simpler and more transparent way of working with its suppliers, for whom it will now introduce a transparent, standardized payment policy. Additionally, small suppliers will benefit from new shorter payment terms. 

Speaking to more than 1,500 suppliers from across Central Europe at the Tesco CE Suppliers Conference in Kraków, Poland, Tesco CE Product Director Jamie Walker said: “Behind every product we sell are the businesses and the people that work with us. It takes every link in the chain together to deliver great quality products for customers and we want to work together with our supply partners to build sustainable relationships and create value we can share. Part of this is making it simpler for suppliers to work with us, and I am delighted to announce that we are now introducing a shorter payment term of 14 days for all our smallest suppliers.”

That shorter payment term is intended to help small businesses and will be introduced from October 1 for a pool of almost 1,000 suppliers to Tesco in Central Europe, some 176 of them in Hungary.

“We’ve been supplying Tesco for 10 years now, and during this time our relationship has improved constantly,” said Zsolt Váncza, managing director of cake supplier Oros-Süti Kft. “The recently announced new payment terms will make our operation more flexible and give us the confidence to look to the future and to work on our plans without worries. It is important to local small businesses like us, and we are happy to see that Tesco is open to the collaboration.”

The multinational retailer, one of the biggest employers in Hungary, has also said that in a bid to increase transparency and simplicity it will be introducing standardized terms for all medium- and large-sized suppliers, who will be paid within 30 days for food and groceries and a maximum of 45 days for non-food groceries, and 60 days for general merchandise.

Tesco further plans to introduce a new helpline designed to help suppliers resolve any queries within 48 hours and giving them a single point of contact when they need help. The Tesco Supplier Helpline is currently being trialed in Poland and will be extended to all four countries in Central Europe in the following months.

“We know how important fast and efficient communication is for all businesses. The Supplier Helpline is another step forward in strengthening our relations and openness with business partners,” Walker commented.

Tesco added in a press statement that the steps “are designed to foster relationships that are professional, profitable, long-term and fair.” 

The comment about dumping food rubbish in Hungary was made by János Lázár, the minister heading the Prime Minister’s Office, at his weekly press conference on June 16. He was particularly concerned about the processing industry, but said that retail is itself exposed to “multinational retailers in foreign ownership.”

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