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EMD negotiates optimum trading terms for bulk
procurement for its members. For this purpose, a steering
committee composed of the members and coordinated by EMD, draws
up annual plans to establish which products are relevant here.
In general these are mass-market products in the own label
segment: under which brand name the members then market the
products is up to them. The individual member is also free to
choose which negotiations and procurement projects he wishes to
participate in.
All members interested in taking part in a
particular procurement project are invited to participate in the
working group which will be dealing with that project: from the
selection of the manufacturers to the tendering process, right
up to placement of the order. All of these steps take place on a
centralised basis through EMD. The manufacturers achieve from a
single order a considerably higher order volume at less
transaction effort than if each individual member would tender
for itself. On the other hand, the members profit from
considerably more favourable trading terms.
Just a few figures underline the significance of
this area: the procurement volume has already exceeded the
billion Euro mark. Among other things, 78 million litres of
fruit juice and ice tea, 29,000 tonnes of pasta products, 30,000
tonnes of deep frozen fries, 6,000 tonnes of potato crisps and
5,500 tonnes of rice were procured. That such volumes give EMD a
quite strong negotiating position is obvious. |
