Tesco stays keen on FGP

Tesco talked up its project to develop factory-gate pricing this week, which is spreading from the frozen sector to fresh produce.
The supermarket giant says that 90% of its frozen food supply market is now operating under the factory gate pricing scheme.
With 500 primary distributors, and movement of 20 million cases a month, the project is moving ahead after initial opposition from haulies. “This is a collaborative approach. We are working in partnership,” a Tesco spokesman says.
Tesco says that it has carried out research of hauliers’ attitudes to factory-gate pricing since the launch of the scheme and that 72% said it has been a “positive experience”.
Hualiers did express concerns, and workshops were arranged where those concerns were listened to.
John Raymond Transport is one of the larger hauliers to experience the factoy-gate pricing system; others are understood to have registered the change in ambient goods haulage.
One of the smaller contractors was scathing. Peter little, of Meeks in Luton, said the change was all about the big retailers saving money and the hauliers losing money. He predicted that the system would founder and said he would not get involved.
Meanwhile, he added that he tuned down two trips to Milton Keynes’ Tesco store last week because he didn’t want his truck sitting there half the day. “You are never going to get a 100% perfect organisation”.
Last week wincanton’s new chief executive, former Tesco distribution chief Paul Bateman, supported factory gate pricing by saying that it was a logical development for the industry.
He said that Wincanton, as Tesco’s largest supplier in the UK, had an important role to play.