Having your business ethics challenged in the court of public opinion is never a comfortable place to be.
The events of the past few days are clearly a reminder to all of us to be constantly aware of the environment in which we operate and conscious of how one’s business practices can be perceived by others.
Of course, it shouldn’t be a big surprise that businesses seek to get best value from all their commercial relationships. Indeed, we have a duty to our employees, customers and shareholders to be as competitive as we can. In today’s grocery market, consumers are looking for the best bargains and are increasingly prepared to shop around.
The whole supply chain, including retailers, manufacturers and suppliers, are very conscious of the need to give consumers good value. This was the context for our ‘invest for growth’ programme.
We have communicated openly about the programme over the past 18 months in supplier meetings and conferences and also to investors. The ‘invest for growth’ programme was based on our belief that it’s reasonable to ask our suppliers to invest in a growth journey from which we would both potentially benefit.
“The reality is that we are passionate about our supplier relationships”
This has helped us invest in new products, marketing and promotions. And in return, many of our suppliers have gained a larger slice of our business, enabling a good proportion to grow their own businesses and take on more people - a fact that several have been willing to endorse publicly.
While the programme has operated successfully for some time, it’s clear we made mistakes in how we executed some elements. However, we have learned from this experience, taken rapid action to modify our programme and we will do better in the future.
The reality is that we are passionate about our supplier relationships and hugely appreciate all that our suppliers do to support our business.
In a recent survey of our suppliers, carried out anonymously by an independent company, the vast majority said their relationship with Premier Foods was ‘good’ or ‘very good’, the highest rating among our benchmarked competitors.
And we’re also a big supporter of small businesses. More than one third of our top 250 suppliers have fewer than 250 employees and, of our total procurement spend, about a quarter is with small businesses, the same target the government aspires to for public procurement.
We have lots of great stories to tell about how we work with our suppliers as well as our commitment to supporting British agriculture, skills for young people and what our 4,000 dedicated employees do to support their communities across the country.
My hope is that recent events won’t detract from what we do every day to be a decent and ethical business partner.
We have had a strong reminder of how critical perceptions can be and the importance of executing one’s business practices consistently and in line with society’s expectations. This is a salutary lesson for all of us.
Gavin Darby is CEO of Premier Foods