Elaine Watson
A growing number of suppliers are refusing to participate in online auctions amid concerns that the buying tool is unfair and open to abuse.
Almost three quarters (71%) of supermarket buyers in our reader panel this week admitted suppliers had refused to take part in online auctions.
But a whopping 88% said net auctions were fairer than other procurement tools such as sealed bids, while 100% said the technology was here to stay.
One buyer commented: "In our experience, auctions have proved to be very effective. Suppliers obviously have the ability to react to competitive pressures, which is an obvious advantage versus sealed bids."
Another buyer added: "I know that there has been bad press over claims that the best price did not win, or that further negotiation went on after the auction­but I think even suppliers that were very anti the whole concept have come to understand the benefits."
However, suppliers contacted by The Grocer said online auctions were merely "blunt tools for beating incumbent suppliers".
Despite retailers' insistence that bidders were vetted carefully, retailers were still phoning up incumbents after an auction to say the contract could not be transferred after all, claimed suppliers.
One said: "In many instances manufacturers, including incumbents, are refusing to join in as the competition is not operating on a level playing field and the best price does not guarantee the contract."
Some claimed they had been asked for cash after an auction to cover the retailers' costs. A sales director said: "I think they are going to die a natural death. People just hate them."
CRTG general manager category buying, David Messom, confirmed he had "one or two suppliers that have refused to come in on auctions, or those that just don't like the process. Some have been fairly bitter, and they have made that clear."
But he added: "Auctions are probably a necessary evil ­ they save a huge amount of time. The number we are running is growing by the month."
He rejected claims that bidders were not operating on a level playing field: "It's our job to make sure that everyone invited can meet the spec."
Over a third (36%) of buyers on our panel had used e-auctions, and of those that hadn't, 50% expected they would use them in the future.
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