Retailers set out their 'sustainability' credentials

Related tags Food safety Food Organic food

When food retailers and producers all over the world met at last
year's CIES industry summit, they were set five 'tests' by
celebrity speaker Bob Geldof to see if their company's business was
sustainable. Meeting again this week at the 2004 summit,
representatives from five food retail groups from across the world
were asked to comment on initiatives they were currently carrying
out to try and meet these targets.

Perhaps unsurprisingly, all of the panellists went to great pains to stress the positive steps they had taken towards promoting a sustainable food trade.

John Menzer, president & CEO of Wal-Mart International, the world's biggest food retailer whose sheer size makes it a frequent target for campaigners concerned about supply chain issues, said that his company had concentrated on two key areas in recent years: free trade and being a good corporate citizen.

As a multinational retailer, the company has "a vital interest in the streamlined and sustainable flow of international goods, services, agricultural products and financial capital"​, he explained, adding that Wal-Mart supported initiatives to cut tariffs in sectors such as textiles and food products, such as sugar.

As the world's largest company by sales, Wal-Mart also took the obligation of being a good corporate citizen very seriously, he stressed, as illustrated in its commitments to the fair treatment of suppliers, energy conservation, supporting charities and being an exceptional employer.

Anders Moberg, the new head of troubled Dutch retail group Ahold, said that retailers had an important part to play in promoting fair and sustainable trade, and indeed in developing the food industry as a whole to the benefit of all those involved in it, at whatever point in the chain.

In food safety, for example, the Global Food Safety Initiative co-ordinated by CIES had facilitated international trade by reducing auditing costs and stimulating exports from developing countries, he said.

At the same time, retailer-driven agricultural standards went further than food safety, he argued, as shown by Ahold's supply chain project in Ghana, which had supported jobs and schooling for 500 local people. To promote sustainable agriculture, Ahold encourages the reduction of traditional subsidies, together with a minimum harmonisation of legal standards regarding ecology and animal welfare, in order to secure a 'level-playing field'.

"If these retailer-driven initiatives were combined with available development and food aid programmes, huge differences could be made,"​ Moberg told delegates at the summit.

Migros, the Swiss retail group, already prides itself on an ethical stance, stocking a wide portfolio of ethical, fairtrade and organic food products already, and the company's chairman Claude Hauser, told delegates that the next stage in developing the market for such products was to offer greater added value.

Migros, he said had developed a range of special labels under its umbrella Engagement brand, offering standards in areas like organic products, while in non-food, the retailer had developed a Code of Conduct for suppliers. "The important thing is to reach standards that are accepted by all your suppliers and which then provide a model for other retailers to follow,"​ he explained. "Migros' commitment to developing such standards is shown by the fact that its special labels account for around 15 per cent of total sales."

For Vincenzo Tassinari, chairman of Coop Italia, the focus has been rather on food safety, the environment and human rights, three key areas on which it has been working in partnership with its suppliers. The ambitious programme required "cultural change"​, he said, adding that such industry initiatives were crucial because in today's context of globalisation, national governments and organisations like the WTO were not able to protect consumers against risk.

Meanwhile, Manuel Fong Jr., managing director of Supervalue in the Philippines, argued that globalisation had challenged retailers and suppliers by creating "heightened consumerism"​: with the advent of the information age, common issues such as food safety and corporate governance had emerged among consumers worldwide, he said.

In this context, offering quality product and low price are a given, he said, but consumers are now demanding moral and ethical values. Core values must be instilled at every level of the organisation, he stressed, since "only when such 'good corporate citizen' behaviour is consistently applied in all stakeholder relationships can trade be truly fair and sustainable long term​". Such values are vital because leadership in business and other spheres today suffers from a "credibility gap"​, he said.

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