The UK's second-largest supermarket Asda will soon be sourcing its imported produce through a sole importer.
The company has come to an agreement with suppliers Geest subsidiary English Village Salads (EVS) and Thames Fruit whereby both businesses will form a new company “which will become the vehicle to create a single importer for Asda produce,” Mike Snell, Asda's business unit director in charge of produce, told the Journal.
All products to be supplied through the single importer will be phased in over a three-year period starting next year. “We have done the feasibility studies and most of our produce will come through the sole importer although there are lines we are unsure of as yet ñ such as exotics ñ but it would certainly be the bulk of our produce,” said Snell. Bananas will not be included as Del Monte has a global banana supply deal with Wal-Mart and its subsidiaries, including Asda.
“It will allow us to get closer to our grower base, to invest in them and to de-risk the supply chain,” said Snell. “Currently we often share growers and are quite distant from them, but this will allow us to have bigger and more direct contracts with growers. And in some cases, for example in Chile, we may deal with the same large grower through two or three different channels. We have suppliers in more than 40 different countries and it is difficult to get close to them to ensure food safety and the calendar of supply that suits us. This will help us.”
Significant by their absence from the invitation to form a sole import company are Hart Worldwide, Asda's imported top-fruit supplier and Malet Azoulay its stone fruit, mango and avocado supplier.
“We have a commitment to them, and as long as we honour that they are happy with it,” said Snell. “They are very capable suppliers, we have a good relationship with them and they have not done anything wrong, it is just time for us to move on to this stage.”
The finer details of the new company being set up are yet to be thrashed out, but it is likely to be a Geest company in which the head of Thames Fruit Emilio Teresa will have a “large shareholding” Snell said.
“The first issue is integrating two sizeable businesses,” said Snell. “Geest EVS is ideal for the northern half of our business as it is based in Selby and Thames Fruit for the southern half as it is based in Kent.”
Asda's produce buying and technology staff have contacted their overseas growers and will be travelling to meet personally those that wish to discuss the changes further. “Growers have their own businesses based on trading relationships and whether they want to come with us will depend on them, how much business they have elsewhere and so on. It is up to them,” said Snell.
“We have got nothing to hide and we have done this for the right reasons and we want to do it properly.”
freshinfo contacted Geest, Thames Fruit, Hart Worldwide and Malet Azoulay but none of them were available to comment.
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