The embattled manufacturer drew flak from a range of sources over its requirement for suppliers to invest in the business or face delisting.
Premier Foods produced a list of suppliers on Friday (December 5) to offer testimonials about the strength of their business partnership with the manufacturer.
Participants included: transport solutions provider Jigsaw, food branding agency Robot Food and Olympus Automation, part of the OAL group. Its md Harry Norman said his business had been a supplier of advanced bulk material systems to Premier for the past 20 years.
‘Fully engaged’
“Premier discussed that they wanted to find savings in the supply chain by rationalising the number of suppliers, in return for increased business levels,” said Norman. “OAL Group was initially sceptical; but after seeing the investment for growth plans, fully engaged in the programme.”
Norman concluded: “As a preferred supplier our sales costs with Premier have reduced far more than the investment we made; making it a win-win for all parties.” See the full list of testimonials at the end of this article.
‘It doesn’t say very much’
But law firm Rollits was less than impressed. “If that’s the best selection of testimonials they can come up with, it doesn’t say very much. They aren’t exactly household names are they?,” said the firm’s partner corporate finance Julian Wild.
“Getting a small number of unknown suppliers, who are presumably dependent on Premier, to come out in support is a bit desperate,” he added. “None of Premier’s larger suppliers will want to say anything for obvious reasons. They all know that this is a price reduction in the form of a big cheque up front.”
Premier Foods backtracked on its supplier investment plan yesterday (December 7) with a pledge to simplify the system. Its decision followed widespread condemnation of the practice on the social networking site Twitter.
Supplier testimonials
Jigsaw, md Andy Humpherson:
“I would like to express my support for Premier Foods and confirm that the recent supplier initiative has had a very positive impact on our business. Prior to the Invest in Premier Foods Programme, Jigsaw was one of a large number of transport suppliers in UK. We have always enjoyed an excellent relationship with Premier Foods but this programme has given Jigsaw a platform on which to significantly grow turnover with one of the largest food suppliers in the UK market. Increased revenues have presented additional employment opportunities with our Premier Foods contract team almost doubling from eight full-time equivalents [FTEs] to 14 FTEs. Investment in IT systems has followed with Jigsaw now able to offer enhanced IT solutions to Premier Foods to enable more efficient operations. Through supplier consolidation, previously complex transport operations in the Premier Foods network have now been simplified, enabling efficiency gains in terms of reduced cost and more importantly reduced road miles.”
Allied Protek Engineering, md Paul Wilson:
“We were invited to join Premier Foods Investing for Growth Programme in 2013. Since making a small investment, Premier has not only awarded us more business direct, but has actively promoted our services to overseas based equipment manufacturers who have engaged us to install their equipment on a number of Premier Foods’s sites. Our turnover related to business with Premier Foods has increased six-fold in the past 14 months from about £0.3M pre-investment to about £1.8M currently. This increased trading has contributed to a substantial growth in our business allowing us to increase our workforce, creating 22 additional full time positions in the past 12 months. An increase of 20%.”
Robot Food, director Simon Forster:
“We are supportive of Premier Foods. We have a good relationship with the company and in 2014 won Premier supplier of the year award. Working with Premier has raised our profile amongst our peers and hopefully with other potential clients. This growth has enabled three new employees this year and we are hoping to take on two more early in 2015.”
Olympus Automation, md Harry Norman:
“OAL group have been a long-term supplier of advanced bulk material systems to Premier for the past 20 Years. Premier discussed that they wanted to find savings in the supply chain by rationalising the number of suppliers, in return for increased business levels. OAL Group were initially sceptical; but after seeing the investment for growth plans fully engaged in the programme. Taking a long-term view we regarded the Premier initiative being much more transparent and less costly than rebate programmes adopted by some other manufactures. As a preferred supplier, our sales costs with Premier have reduced far more than the investment we made; making it a win-win for all parties. OAL group turnover with Premier has gone up to £2.4M year-to-date since making the investment.”
Sartorius Intec, general manager of the laboratory and process technologies and equipment supplier Colin Maher:
“Sartorius Intec have been a supplier to Premier Foods for several years. Our business with Premier in recent years has been small (up to £20k a year) and restricted to conducting the servicing and calibration of some of Premier’s range of product inspection equipment. Since making an Investment for Growth payment to Premier in 2013, we have seen a significant increase in enquiries and subsequent orders from Premier amounting to approximately £500k year to date. Having watched the report as a supplier I can say that to me, this is no different to us spending money on marketing, but the return on investment against any previous spend on marketing has been significantly higher over a shorter period of time. If at the same time we can ensure the future growth of both companies then this can only be a benefit.”