Purchasing Direction and Oversight Board

Purchasing Direction and Oversight Board
Progress and Plans

• Purchasing Trends
• Programmes
• Ethical Supply Chain
• Constructive Engagement

• Total Purchasing value = £55.9m down 4.2%
• In addition external trade fell by £3.2m
• Retail = £30m or 53.7% of total purchases
• Licensed = £20m or 35.9% of total purchases
• Catering = £5.8m or 10.5% of total purchases
• Top 20 volume unions = 53% of total purchasing value

Retail Plus and Meal Deal –
• Slight increase in marketing revenues
• Payments to members = £798k an increase of £39k
• Sandwich and snack products values up by over 11%
Licensed Trade Plus –
• Marketing revenues down by 45%
• Payments to members down by 33% to £170k

• 8 step process to evaluate supplier E&E credentials
• Sound Sourcing Guide – all suppliers commit to meet these standards
• Ethical Screening
• Ethical and Environmental Accreditation
• E&E Commitments in Supply Contracts
• Supplier Audits
• Ethical Plus Retail Programme

• Constructive engagement with contracted suppliers and NUS Extra partners
• Recent examples are Starbucks, Pepsico and Amazon

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Beer levy change from £3 per barrel to 2% of invoice value
– aligns with all other licensed contracts
Draught 4 year term starting July 2015
Packaged 2 year term starting July 2015
Carlsberg – no price increases. RPI excluding duty price increase from July 2016
Heineken – some price reductions and some prices held at existing levels. Tender prices held until July 2017
Coors – 2% price increase. £4.67 per barrel annual increase from July 2016

Inbev – 3.5% price increase. Annual price increase of 4% duty exclusive from July 2016
Kopparberg between 1&3% price increase. Price increase in
July 2016 of 3% duty exclusive
Diageo – no price increase
Gaymers draught – no price increases
Tennents – 3% increase
Rekorderlig – 2% increase
Brothers Cider – withdrew their tender submission
Budvar – declined to tender
Gaymers packaged – no tender submission

Overall price increase based on current volumes 0.2%
All products may stock apart from Carlsberg draught lager – must stock in all unions but not in all bars

Carling replaced by Fosters
Fosters v Carling
Fosters price July 2015 £63.20
Carling price July 2015 £64.93
Fosters price July 2016 £63.20
Carling price July 2016 £66.36

• Water prices remain level.
• Natural stills has some increases of less than 3%, Oasis increase of 6%
• Carbonates overall 3% increase
• Energy prices have some increases but overall prices have decreased, some by as much as 10%.

Carbonates
Pepsi
• Added to Licensed Trade in addition to Coca-cola
• Available from Carlsberg
• Benefits outlets wishing to consolidate deliveries and unable to meet the minimum drop quantity required by
CCE.

Energy Drinks
Monster
• Added to Carlsberg range for Licensed Trade in addition to CCE
• Assists outlets wishing to consolidate deliveries and unable to meet the min drop quantity required by CCE.
Boost
• Lower priced alternative in retail

Water
Harrogate Spring Water
• Alternative UK water in Licensed Trade to Strathmore
Highland Spring Water
• Alternative UK water in Retail to Brecon who have longstanding supply issues
Abbeywell
• Water addition to range available via CCE delivery, will assist in meeting CCE minimum drops

Natural stills
Bottlegreen
• More interest in premium soft drinks
Innocent
• Alternative to naked smoothies

Stationery 3 year contract starting 1 st July
Accepted suppliers
• Mitsubishi – 2% price increase
• Nuco – no price increases
• Pilot Pens – 2% price increase
• Pukka Pads – no price increases
• Sinclairs – 2.5% price increase
• Staedtler – 2.8% price increase
• Tiger Stationery – no price increases
• UKOS – 2.8% price increase from
• Hamelin Brands - new

Discontinued suppliers
Exaclair – unacceptable price increases
Helix Trading Ltd – unacceptable price increases
Snopake – declining sales and expensive products
Stabilo – unacceptable price increases and poor sales

Additional Information
• 1.5% average price increase across all existing stationery suppliers
• Providing a good, better and best product offering across all suppliers
• Number of suppliers reduced whilst still ensuring product alternatives in all categories

• Being easy to do business with
• Engaging with strategic partners
• Improving member relationships
• Ethical development
• Purchasing contracts effective 1 st July
2016

• Retail threat from symbol groups
• Strong support package
• Integrated EPOS sytem
• Dedicated online ordering system
• Central warehouse
• Promotional allocations

• Cloaked pricing creates confusion over Union buying prices
• Manual EPOS file changes needed at Union level
• Inadequate ordering processes
• We need to change to make it easy for Unions to do business with us

Currently orders are placed via:
• Supplier online ordering processes
• Supplier telesales facilities
• Control rests with suppliers
• Systems are inefficient

• We will offer unions a national online ordering system supported by Itrade Network
• Catering suppliers live during March 2015
• Licensed suppliers following by July 2015
• Retail suppliers phased later in the year

• Currently manual input at union level
• We will move towards offering automatic integration of file changes into union epos files
• We intend to have some trial sites in place before the end of 2015 working with Fidelity

• Retail category trends highlight decline in traditional areas such as stationery and greeting cards
• Growth has come from Grab & Go and
Convenience
• Co-operative supply contributed to convenience growth but not to Grab & Go
• Opportunity to develop an improved Grab & Go concept with the Co-operative

• Additional opportunity exists to develop ordering systems and joint branding
• NUS Extra relationship already exists
• We are looking to identify further areas where we can develop our strategic partnership with the Co-operative

• We need to consider ways to increase Licensed
Trade purchasing
• Interlink licensed trade and catering
• Insight development into catering and menu development
• Develop a national customer marketing strategy for licensed trade
• Collaboration with union commercial staff via webinars
• Network session with suppliers
• Catering focus group

Ethical Clothing
• Working with Epona to deliver a living wage product
Ethical Supplier Event
• March 2015 event at House of Commons
• Explore how suppliers work with young people regarding employment
Ethical and Environmental Accreditation
• Developing a new feedback tool to help suppliers understand areas where improvement is needed

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• Spirits and premium packaged spirits
• Wines
• Sandwiches
• Catering Ambient
• Catering Frozen
• Catering Chilled
• Catering Light Consumables
• Cellar Gases
• International Foods
• Crisps and Snacks
• Sweeter Snacking
• Greeting Cards