Elaine Watson
Tesco has started using online auctions as a procurement tool in central Europe as own label starts to gain a real foothold in the market.
The auctions are now being used to joint source own label food, non-food and items not for resale across all of Tesco's operating companies in Poland, the Czech Republic, and Slovakia.
The work follows moves by rival Ahold to set up a central European sourcing operation to pool buying across all countries in the region on some products.
Tesco Poland corporate affairs chief Wojciech Sokol said Tesco had been using auctions in the region for about six months.
Own label is a major growth area in the market and Tesco has rapidly built up several hundred Value and standard own label lines in recent years. Tesco Finest has also been introduced into selected stores on a trial basis. Tesco in particular prefers to source products locally, and several UK companies, such as McBride, have started production in the region to reduce labour and transport costs.
McBride now has a substantial own label business with several multinationals in the region including Tesco, said McBride International MD Bernard Edmunds.
"Private label is still in its infancy in eastern Europe but we expect it to grow strongly, and in due course we will be well placed to service customers more globally as they extend their international operations."

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