Asda looks for single milk supplier
in a move that could spell an end to some of the contract of its
major suppliers.
At present, Asda's main suppliers are Dairy Crest, Robert Wiseman, and Arla Foods. But as part of the company's Total Category Management scheme (TCM), the company proposes to either choose a singly supplier of fresh milk or to encourage agreements between suppliers so that the process is simplified.
It is expected that one of these companies will win the single contract, and would set up dedicated processing facilities to supply the company with milk.
TCM is a business model that has been introduced to a number of areas at Asda. The company expects that an open-book accounting system will be used if a sole supplier is chosen for its fresh milk. This will allow more transparency in the relationship between the company and the supplier.
The company says that by developing an Asda dedicated supply chain it will build on its support for the British dairy industry. It has issued a letter to all suppliers in December last year and has asked them to reply with an expression of interest.
Asda sells 450 million litres of milk yearly and its milk market share in the UK is worth £230 million (€333 million).
