Aldi's commitment to UK growers

Fruit and Veg Pledge logo stamp_275_267

Aldi has become the first retailer to sign up to the NFU’s Fruit and Veg pledge – and even gone further. Some if its commitments include:

  • Treating all its suppliers fairly and building long term relationships with growers that offer greater certainty and stability
  • Offering greater price certainty to growers – honouring contracts, not renegotiating agreements, paying the agreed price and not imposing overriders, back dated charges or hidden penalties
  • Not asking suppliers to fund promotions – elsewhere, promotions are commonly funded by growers
  • Not charging suppliers for customer complaints – a major concern investigated Groceries Code Adjudicator and a significant unpredictable cost for businesses
  • Committing to buying seasonal British fruit and veg; sourcing regionally and from smaller growers  – Aldi is already an industry leader with more than 40% of fresh produce sold being British.

Guy Poskitt_170_255NFU horticulture chairman Guy Poskitt said: “Aldi’s response to our pledge clearly details the integrity, honesty and openness of its business, and highlights its commitment to long-term supply relationships, equitable distribution of reward along the supply chain and fair and respectful trading relationships.

“We know that there are other retailers who have best practice measures in place and we are keen to discuss how they can make a pledge, but we want to applaud Aldi for being the first to do so publicly and committing to the key all the asks our pledge – including price certainty, long term relationships, seasonal British produce and above all, a healthy sustainable supply chain that works fairly for the supplier, retailer and consumer.”

Tony Baines, managing director of buying at Aldi, said: “As a long-standing supporter of British farmers, Aldi is proud to back the NFU’s Fruit and Veg Pledge. True to our family values, we treat growers and packers across the UK equally and fairly. This allows us to build long-term and sustainable relationships with them, which in turn enables our customers to benefit from unbeatable prices and quality.

“The transparency and fairness with which we treat all our suppliers was recently recognised by the Groceries Code Adjudicator’s annual supplier survey, which named Aldi as the best performing grocery retailer for compliance.”

Here is a more in-depth breakdown of Aldi’s commitments:

- Promotional support that is not funded by suppliers. Aldi’s promotional deals like its award-winning ‘Super 6’ (where it offers weekly deals on six fruit and veg) are successful in drawing customers into store. The supplier is happy because they get promotional support to help with maximise use of crop flushes, but they also get regular price week-in week-out during the promotion. The customer can be happy because this is a genuine deal from Aldi, not one that is directly funded by growers;

- Policy of no charges for late or missed deliveries, or customer complaints – the level and cost of customer complaints has been a huge concern for the industry, so much so that the Groceries Code Adjudicator launched an investigation into customer complaint charges and recently produced a best practice report for the industry to adopt. Aldi does away with any concern – it doesn’t make the charges in the first place;

- Simple net cost price agreements, with no back margin mechanisms like overriders or penalty rates. If suppliers do a deal with Aldi, it honours that deal and pays the agreed price. If sales of a product are unsuccessful, Aldi does not ask the supplier for more money to share the impact of poor sales;

- A commitment to supplying seasonal British fruit and veg. In 2014, more than 40% of Aldi’s fresh produce was British – significantly more than the industry average of around 35% (2013);

- An openness to developing longer-term relationships with its suppliers;

- Planning and open communication;

- A flat reporting structure, which means Aldi lean and responsive in terms of administration;

- Written contractual agreements;

- The support of a wide and diverse supply base, that provides smaller growers with the opportunity to supply a major retailer.