Exclusive Elaine Watson Every major UK grocery retailer is now using online auctions to drive down procurement costs. The Grocer can exclusively reveal that Morrisons has been conducting pilot auctions for own label and indirect goods, despite publicly spurning the technology. And Spar also plans to start trials. Online auctions are now established at Tesco, Safeway, Asda and Sainsbury as a standard procurement tool, while the Co-operative Group and Nisa CBC are also ramping up their involvement. But suppliers say retailers are following the principle that "as long as you can define the product and more than one supplier can make it, you can auction it". Several own label suppliers contacted by the Grocer said they were deeply unhappy both about the auction process and the type of contracts retailers were putting up for tender. One said: "Auctions on value added lines are not doing anything for supply chain relationships, which are supposed to be built on trust. "They just encourage short-termism because they are offering slugs of business at a time. There is no incentive to invest because chances are you'll lose the contract next time on price." Several account managers described the auction experience as frightening, alienating and immensely frustrating. "You don't own the process at all. There's no way of verifying what's on the screen or knowing if the bids are genuine," said one. "When I saw the starting price ­ I couldn't believe it. We are number one in our field and the opening bid was 25% less than our best quote." Tesco director of supply chain development Barry Knichel said Tesco understood suppliers' concerns, but suggested some had been "sitting on healthy margins" for too long. Spar UK trading director Tom Davies said initial work on auctions was focusing on Spar international own brand lines such as corned beef and tuna. But he said there was potential for sourcing some commodity lines in this way for the UK market. "Web auctions are absolutely brilliant for cheapest on display items like soft drinks," he added. l For a major analysis of the development of online auctions, see next week's issue. See Opinion, p18. {{NEWS }}