Magnit and the Potato Union, which unites more than 90 participants in the Russian potato and vegetable market from Kaliningrad to the Krasnoyarsk Territory, have agreed to cooperate to develop a mutually beneficial partnership between the retailer and suppliers. The parties have created a platform for joint resolution of current issues and improvement of the institution of direct long-term contracts, where everyone can become a participant.
The working group included experts from Magnit, Potato Union and partners of the Agrocontracting project, which the retail chain has been developing for more than five years. Now the project includes about 65 farms, including small ones. The share of sales of products in the company's stores received under agricultural contracts is about 30% in the vegetable and fruit category. The creation of a working group will allow suppliers to exchange information with the retail network in the "single window" mode.
The Agrocontracting project of Magnit involves the conclusion of contracts with Russian farms for future crop deliveries. This allows farmers to have a reliable partner, be confident in the sale of their products, and companies to purchase vegetables and fruits without intermediaries and control the entire production chain, which means offering customers high quality goods at affordable prices. The geography of producers is extensive, in addition to the main crop - potatoes - suppliers grow more than 50 types of products for Magnit. In 2021, the supply of domestic products under the Agrocontracting project increased by 21% to 305 tons.
Magnit is interested in long-term relationships with domestic producers in the Fruits and Vegetables category, one of the most significant for buyers. Close cooperation with the Potato Union implies an open dialogue not only with potato suppliers, but also with companies growing borscht vegetables. This will allow accumulating questions and suggestions from existing and potential partners on the organization’s platform, more efficiently and quickly solving problems in a number of important areas: launching new projects and work formats, expanding the range, quality and conditions for product acceptance, supply volumes, advance payments, filing claims and sanctions and many others. It is planned to analyze specific cases of cooperation and classify to optimize interaction.
In the near future, the specialists of the working group will discuss further steps and work out a roadmap for the development of the initiative. For example, an active response was received by the proposal for early deliveries of domestic potatoes to Magnit stores - already in June-July - so that buyers have the opportunity to purchase new crop products immediately after they are harvested, and the company can sell the assortment directly from agricultural producers, bypassing intermediaries.
Pavel Rozhkov, head of the agro-contracting department of the Magnit retail chain:
— We are always glad to new partners and at the same time we are actively developing relations with existing suppliers. Joint work with the Union will improve the Agrocontracting project, attract a wider pool of farmers, popularize local varieties of vegetables and fruits among buyers, and generally increase the attractiveness of local products in our stores. We are also looking at the development of new areas, for example, the sale of refined and pasteurized products in the network.
Tatyana Gubina, Chief of Staff of the Potato Union:
“Due to competent work within the framework of the retail network agricultural project, suppliers are growing in volumes and assortment. Over the years of cooperation, a unique experience for the industry has been accumulated in the application of certain articles of the contract, which we replicate for further interaction with farms. In the process of work, many operational issues arise, so a working group has been created to improve communications. The Competence Bureau of the Potato Union is ready to advise, accompany, lobby the interests of agricultural producers in matters of relations with retail chains.
For more information, please contact:
External Communications Department:
press@magnit.ru