Fruitnews.ru made a reseach why Russian retailers prefer working with dealers and middlemen to dealing directly with suppliers.
Several retailers leading their activities in Russia, organize their work in a way to exclude other companies from the supply chain of fruits and vegetables although this is certainly a real opportunity to get the best prices. Certain retailers begin to interact directly with the growers, but then return to the established pattern, which includes dealers and middlemen.
There are certain reasons for that. It is the lack of modern storage facilities which has already become common in our country, lack of screening and treatment facilities, and poorly-organized supply chain:
– In cities where the producers have well-organized processes of logistics, training and storage of goods, we work directly with them. But if the grower does not comply with these requirements, we have to buy the product from the distributor, who is able to present the product, calibrate it and supply to supermarkets. For example, an onion grower from Rostov can only produce the product and put it in storage, – says Dmitry Agaltsov the Purchasing Director of the section “Fruits and Vegetables” of the “Lenta” retail chain.
The Divisional manager of the department “New Products” of the “Real – Hypermarket LLC” Christian Look also highlights the complexity of direct cooperation:
“Risk of the quality of the goods carried by the retailer. If a vendor supplies defective goods, the seller will have to spend time and money on sorting out and disposal, writing claims to the supplier. Meanwhile, this item will not appear in stores, so the seller also suffers damages due to reduced turnover. Also the retailer must go through all the procedures for customs clearance of goods, involving additional (and considerable) human resources, which are not always built into the company’s staff.
Then, too large amounts of supplies from manufacturers. Minimum order of goods of one type is, as a rule, not less than 20 tons. Usually, we do not need such a large volume. In addition, according to the quality standards applied in the “Real” chain, fruits and vegetables can not be stored in our warehouse for more than three days”.
Many experts also believe that, despite the willingness and desire of many retailers to pass to direct supplies one day, intermediaries will remain.
The reason is, many manufacturers are working on a prepaid basis, and quotas for shipments are counted in hundreds of tons. There are also air deliveries of exotic fruits and berries from Brazil, China, South Africa and other regions. This is a very expensive and risky way, which is, as retailers forecast, will long remain the responsibility of third parties.
Source: www.fruitnews.ru