Welcome to UNDERSTANDING TESCO DEALS AND CHARGES ROI SUPPLIER GUIDE 2017

Transcription

1 Welcome to UNDERSTANDING TESCO DEALS AND ROI SUPPLIER GUIDE 2017 VERSION 1.0 BEGIN

2 UNDERSTANDING TESCO DEALS AND PURPOSE We would like to increase transparency and bring clarity to the way we work together. The aim of this guide is to provide an explanation of every Deal and / or Charge that may apply to you as a supplier. We have created this as an interactive PDF, which is not printable. The guide covers: the definitions of Deals and Charges and the methodology for calculating Charges (including VAT). how we notify you of a Deal or Charge. how you can challenge any Deal or Charge. WHAT ARE DEALS AND? We classify funding that is agreed with you for a specified activity as a Deal. Charges are applied by us when there are conformance issues or when we have carried out a specified activity. The majority are processed through the Deals and Charges Webform. You may have agreed to a Deal or Charge in your Supply Agreement Webform, or on an ad-hoc basis. Either way we will always notify you of the Deal or Charge before we take further action. Please note that there are deals and charges on this guide that may not currently be applicable to you but could apply in the future. Also note that Tesco will not penalise you, the supplier, for an event that is outside your control. HELP AND SUPPORT For further information, please contact your Tesco Buyer or visit CONTINUE 2

3 HOW THIS E-GUIDE WORKS Select the menu icon to return to the menu page Select each topic heading for quick navigation Select forward to move onto the next page Select back to return to the previous page CONTINUE 3

4 FULL LIST DEALS Feature / Promotional Space Deal Overrider Deal Marketing Fee Deal Markdown / Exit Support Deal Third Party Cost Price Equalisation Deal Cost Price Reconciliation Deal Foreign Exchange Adjustment Deal Commodity Cost Price Overrider Deal Category Management Deal Consignment Deal Distribution Storage Deal KEY Via the Deals and Charges Webform Not via the Deals and Charges Webform Primary Distribution Charge Service Level Charge Waste Charge Emergency Product Withdrawal Charge Delivery Non-conformance Charge Barcode Non-Scan Charge Coupons Redemption Charge Equipment Rental Charge Simple Price Promotion Threshold % Funded (Multisaver) Promotion Promotion Funding Reconciliation Missing Promotional Funding Charge Cost Price Claim Ethical Audit Charge Ethical Online Database Charge Site Audit Charge APPENDIX Whilst the majority of Deals require explicit agreement, and for the majority of Charges we will assume acceptance after 30 days if you haven t responded, there are some exceptions which are noted in this document. For example: Service Level is listed as a Charge, but processed as a Deal and therefore requires your explicit acceptance. Missing Promotional Funding is listed as a Deal, but processed as a Charge and therefore we will assume acceptance after 30 days if you haven t responded. Select a topic to begin. 4

5 DEALS DEALS Deals are a type of funding agreement. Tesco will complete a prescribed activity in return for a negotiated amount of money 5

6 FEATURE / PROMOTION SPACE DEAL DEALS A Feature / Promotion Space Deal is used where we agree to put your products in a premium space in our stores (e.g. end of aisle) during a promotion, and you agree to pay for this. Usually we agree a set rate card in the Supply Agreement Webform, which sets out standard weekly charges for the different spaces available. This is structured per product, or for the whole space. Some categories may not have an agreed rate card. If there is no over-arching agreement in place, we can still negotiate with you an ad-hoc agreement. This must be agreed in writing. Once agreement is in place, the Buyer will raise this via the Deals and Charges Webform and send to you for you to accept. VAT is applicable at 23% of the Deal. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 6

7 OVERRIDER DEAL DEALS Overrider Deals are used where you agree to provide a discount on goods provided if we meet pre-agreed targets. They are designed to encourage sales and margin growth. You agree with your Buyer threshold targets at the beginning of the financial year for Overrider Deals. At the end of the Financial Year, your Buyer will confirm whether we met the targets and, if so, how much additional funding is due from you. For example, say you agree to give us 15c off every unit we sell after the first 100,000. At the end of the financial year, we sold 105,500 units so 5,500 x 15c = 825. VAT follows the liability of the Product. We provide regular forecasts and sales data, which help you to track how much funding will be payable at year end (if any). If you have concerns throughout the year, please contact your Buyer to discuss. You and your Buyer will discuss the total amount at an agreed review date at the end of the financial year. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 7

8 MARKETING FEE DEAL DEALS Marketing Fee Deals are when you agree to fund marketing activities across TV / Press / Multimedia / In-store POS. The Marketing Fees can vary widely, depending on the type of marketing activity undertaken. All details will be discussed and agreed between you and your Buyer. All agreements must be in writing, and are usually made on an ad-hoc basis. VAT is applicable at 23% of the Deal. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only the Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 8

9 MARKDOWN / EXIT SUPPORT DEAL DEALS Markdown / Exit Support Deals are used when you agree to fund stock that is sold on marked down prices. For example, after Easter all Easter eggs stock will be marked down since the event is over. This is how Tesco sell through the leftover stock, rather than wasting it. The funding for Markdown Support Deals can be a fixed amount (e.g. 20,000 for Easter), or a specific amount agreed at every unit (e.g. 50c per Easter egg). These terms will be negotiated with your Buyer at the beginning of the event. If the agreement is for a fixed amount, there is no calculation needed. If the agreement if for an amount per unit, your Buyer will calculate the sales of that unit and multiply the funding by the number of sales. For example, an agreed funding of 50c per unit x 38,000 units = 19,000 total funding. VAT is applicable at 23% of the Deal. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only the Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 9

10 EQUALISATION DEAL DEALS Third Party Cost Price Equalisation Deals are used when you have chosen to supply some of your stock using a third party. The deal is designed to harmonise the cost prices for the same good delivered by you and the third party. Third Party Cost Price Equalisation Deals will vary on how they are structured, but focus on reconciling your cost price and the cost price we pay your third party. For example, say you deliver your chocolate bars to us at 10c / unit. You also use a third party to supply 100,000 units to our petrol forecourts. The third party invoice us for 12c / unit. You agree to pay us the difference, i.e. 100,000 x 2c = VAT follows the liability of the Product. If there is no over-arching agreement in place, we can still negotiate with you an ad-hoc agreement. This must be agreed in writing. Once agreement is in place, the Buyer will raise this via the Deals and Charges Webform and send to you for you to accept. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer or the Buying Admin Team will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 10

11 RECONCILIATION DEAL DEALS A Cost Price Reconciliation is a one-off deal, agreed in advance with you. It may be used for an adjustment on stock held by us after a back-to-front movement or cost price reduction, or where you have invoiced an incorrect cost price and we agree to correct it. The calculation must be made based on the difference between the invoiced cost price and the new agreed cost price. In the case of an adjustment on stock, calculation will be as at the date agreed in advance between you and your Tesco buyer. VAT follows the liability of the Product. When the need for a reconciliation is identified, the buyer will confirm the amount overpaid to be recovered with the supplier, and ensure that the future cost price is correct. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. The Webform must include a copy of your prior written agreement. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 11

12 FOREIGN EX ADJUSTMENT DEAL DEALS A Foreign Exchange Adjustment Deal is used when we have purchased stock from you in a currency other than EUR (Euros), and have a previous agreement to align your cost prices with EUR fluctuations. The amount will be manually calculated in accordance with the advance agreement between Buyer and Supplier. The total amount agreed between you and your Buyer can be invoiced in any currency, and can be line level fed to assist with item margin. VAT follows the liability of the Product. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. The Webform must include a copy of your prior written agreement. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 12

13 COMMODITY OVERRIDER DEAL Commodity Cost Price Overrider Deals track the price of key commodities used to make your product, and then we reconcile the price. It removes the need to repeatedly change cost prices because of frequently fluctuating commodities. The calculation methodology of Commodity Cost Price Overrider Deals can vary depending on the structure and complexity of the Deal agreed. VAT follows the liability of the Product. As just one example, say you make Tesco own-label cookies, and wheat is used to make flour. Flour is 10% of the cost price of the cookies. The cost price is 1 per unit, and wheat costs 10c of that. At the start of the year, wheat is 100 / tonne according to the LIFFE index. At the end of the year, the average cost of wheat over the year was 90 / tonne. That means the wheat per unit was only 9c, so the overall cost price was 99c per unit. You then pay us 1c per unit. Say we sold 100,000 units in the year, 100,000 x 1c = 1,000 total funding. HOW WILL YOU BE INFORMED OF THE DEAL? For example, if you make Tesco own-label cookies, wheat will be a key ingredient to make the flour used and contributes 10% of the cost price of the cookies. We can track the price of wheat over time, and then adjust the cookies cost price based on how much the wheat component objectively costs. HOW TO CHALLENGE THIS DEAL DEALS Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 13

14 CATEGORY MANAGEMENT DEAL DEALS A deal between you and Tesco for joint input into meetings, ranging and category expertise for individual categories. Calculation can vary depending on the structure and complexity of the deal agreed. VAT is applicable at 23% of the Deal. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. The Webform must include a copy of your prior written agreement. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 14

15 CONSIGNMENT DEAL DEALS This deal recognises income from concession partner for trading space within Tesco stores. The calculated amount would represent an agreed percentage of turnover from the concession product area. VAT is applicable at 23% of the Deal. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. The Webform must include a copy of your prior written agreement. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 15

16 DISTRIBUTION STORAGE DEAL DEALS A Distribution Storage Deal is an agreement with you, where you pay us to hold stock at one of the Tesco distribution centres on your behalf. The amount is calculated using the number of pallets (full or part) x weeks stored (full or part) x a negotiated charge for storage per pallet (variable by supplier). VAT is applicable at 23% of the Deal. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL The Distribution Admin will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the details of the Deal, then decline the Webform. Only the Distribution Admin can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. The Distribution Admin will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 16

17 DEALS A charge will be raised where Tesco perform a specific activity or service on your behalf. Each charge will be agreed with you before any deductions are made 17

18 PRIMARY DISTRIBUTION CHARGE Primary Distribution Charges are standard charges for use of the haulage services for you to deliver your products from delivery location to a Tesco Distribution Centres (DCs). DEALS This transportation service is charged at a standard rate for all of our suppliers. The only differential which would arise is if we travel direct to a supplier however, this is always pre-agreed with the supplier prior to the direct route taking place. VAT is applicable at 23% of the Charge. HOW WILL YOU BE INFORMED OF THE CHARGE? HOW TO CHALLENGE THIS CHARGE The Distribution Team will send you the details of the Charge in a Deals and Charges Webform request. This will be an with a link to the Webform, which you open to review the details and accept or decline. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the money. If you wish to challenge the Charge, please do so within 30 days of our notification . After a minimum of 30 days, if we have not received a challenge from you and you haven t declined the Charge, we will take that as your implicit agreement. If you challenge the Charge, then decline the Webform. Only the Distribution Team can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. The Distribution Team will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Charge. 18

19 SERVICE LEVEL CHARGE Service Level Charges apply when the volume of goods you deliver to us does not meet the preagreed percentage of what we ordered, e.g. 98.5%. Short deliveries mean a lack of availability for customers and gaps on shelves. This Charge incentivises performance and compensates us for the impact on sales. DEALS A Service Level Charge is calculated using the agreed mechanism agreed in your Supply Agreement Webform. This is usually a set figure or percentage per case the delivery was short by. For example, say we agree a Service Level of 99% and we order 50 cases. If you delivered fewer than 49 cases, the Service Level Charge would apply. If we had agreed a Charge of 10 / case, and you delivered 45 cases, the Charge would be 50. VAT is not applicable on this Charge. If there is no over-arching agreement in place, we can still negotiate with you an ad-hoc agreement. This must be agreed in writing. Once agreement is in place, the Buyer will raise this via the Deals and Charges Webform and send to you for you to accept. HOW WILL YOU BE INFORMED OF THE CHARGE? HOW TO CHALLENGE THIS CHARGE Your Buyer will send you the details of the Charge in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Charge as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Charge. You must actively accept the Charge we will not imply your acceptance after 30 days. If you challenge either the Service Level agreement, or the details of the short delivery, then decline the Webform. Only the Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Charge. 19

20 WASTE CHARGE Waste Charges are applicable where we need to dispose of your unsold products. Waste Charges may be agreed for a number of scenarios, such as new products, where we are unable to accurately forecast demand and too much stock was ordered; promotions, where the promotion was not as successful as anticipated and too much stock was ordered; clearances, where goods have been delisted from a store; goods delivered with a shorter shelf life than the specification, which leads to a high percentage of out-of-date food going unsold. DEALS Waste Charges are agreed in the Supply Agreement Webform at a set amount per case. VAT is applicable at 13.5% of the Charge. For example, say our specification for a cake product requires a minimum of 8 days code life (before the Best Before End or Use By date) when the product is delivered to depot. If you deliver 20 cases of cakes with only 5 days notice, we don t have time to sell them all. If we then cannot sell 4 of those cases because they re out of date, we ll charge you the agreed amount per case e.g. 10 per case, so here 40 +VAT. If there is no over-arching agreement in place, we can still negotiate with you an ad-hoc agreement. This must be agreed in writing. Once agreement is in place, the Buyer will raise this via the Deals and Charges Webform and send to you for you to accept. HOW WILL YOU BE INFORMED OF THE CHARGE? HOW TO CHALLENGE THIS CHARGE Your Buyer will send you the details of the Charge in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Charge as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Charge. You must actively accept the Charge we will not imply your acceptance after 30 days. If you challenge either the Waste Charge agreement, or the details of the wasted products, then decline the Webform. Only the Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Charge. 20

21 EMERGENCY PRODUCT WITHDRAWAL CHARGE This Charge is applicable when we have to withdraw your products from our shelves due to contamination, and also when we need to recall products already bought by customers. DEALS The Emergency Product Withdrawal Charge is agreed in the Supply Agreement Webform. It is designed to cover the cost to Tesco of physically withdrawing the products from stores (including admin at head office), and the impact on sales from lack of availability for customers. There is often also a serious reputational impact on Tesco, especially for own-label goods and product recalls. EPWs and product recalls cause a lot of inconvenience for customers, and lose us goodwill. VAT is applicable at 23% of the Charge. The compensatory element is usually in addition to the cost of goods withdrawn if we cannot sell the goods, then you reimburse us what we paid. If there is no over-arching agreement in place, we can still negotiate with you an ad-hoc agreement. This must be agreed in writing. Once agreement is in place, the Buyer will raise this via the Deals and Charges Webform and send to you for you to accept. HOW WILL YOU BE INFORMED OF THE CHARGE? HOW TO CHALLENGE THIS CHARGE Your Buyer will send you the details of the Charge in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline a Charge as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Charge. You must actively accept the Charge we will not imply your acceptance after 30 days. If you challenge either the Service Level agreement, or the details of the short delivery, then decline the Webform. Only the Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. Your Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Charge. 21

22 DELIVERY NON-CONFORMANCE CHARGE These Charges are raised to recover costs incurred by our Distribution Centres where your delivery has not met Tesco s in-bound delivery standards. Delivery non-conformances slow down the whole delivery process, as the delivery has to be manually re-worked and corrected which is time-intensive. DEALS The Charges are calculated in accordance with the non-conformance table of Charges as listed in the Tesco Inbound Standards manual. You can find the table of charges in the appendix to this guide. The Charges are to recompense for the additional admin and re-work time required to resolve non-delivery conformance issues. VAT is not applicable on this Charge. HOW WILL YOU BE INFORMED OF THE CHARGE? HOW TO CHALLENGE THIS CHARGE A non-conformance report sheet is sent via to you. This details which delivery from you has not met Tesco Inbound Standard, and why (along with photographic evidence where available). Please accept, challenge or decline the Charge as soon as possible after you receive notification. To do so, logon to the TIMS Inbound Standards system: If you have any problems logging in, please contact the Inbound Standards team via inbound.standards@uk.tesco.com. You have 30 days from the date of the non-conformance report to challenge the Charge. To do so, please logon to the TIMS Inbound Standards system: co.uk/nc/ and click to decline the Charge, giving your reasons for doing so. The Distribution Team will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Charge. 22

23 BARCODE NON-SCAN CHARGE Barcode non-scan charges apply when products arrive into depot, but the barcode at outer case level does not scan, or is not recognised. This slows down the whole delivery process, as it has to be manually checked and handled which is more time-intensive. DEALS Our third party service-provider Axicon operate a Tesco helpdesk, to try to resolve issues with non-scanning barcodes. The Barcode non-scan Charge is a flat rate of 620 per incident per depot, to cover the service Axicon provide. VAT is applicable at 23% of the Charge. If there is no over-arching agreement in place, we can still negotiate with you an ad-hoc agreement. This must be agreed in writing. HOW WILL YOU BE INFORMED OF THE CHARGE? HOW TO CHALLENGE THIS CHARGE The Barcoding Team will send you the details of the Charge in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Charge as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Charge. If you wish to challenge the Charge, please do so within 30 days of our notification . After a minimum of 30 days, if we have not received a challenge from you and you haven t declined the Charge, we will take that as your implicit agreement. If you challenge the Charge, then decline the Webform. Only the Barcoding Team can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. The Barcoding Team will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Charge. 23

24 COUPONS REDEMPTION CHARGE This Charge is to reimburse us for supplier-funded coupons our customers redeem in-store. DEALS The Coupon Redemption Charge is calculated by multiplying the value of the coupon by the number of coupons received. For example, if you issued a coupon for 1 off your new product, and we received 5000 paper coupons in-store: 1*5000 = No VAT is applicable on this Charge. Because of the complexity and size of our operations, we redeem all coupons without requiring proof of purchase, and we don t always check the validity of non-tesco-specific coupons upon redemption. HOW WILL YOU BE INFORMED OF THE CHARGE? HOW TO CHALLENGE THIS CHARGE The Coupons Team will send you the details of the Charge in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Charge as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Charge. If you wish to challenge the Charge, please do so within 30 days of our notification . After a minimum of 30 days, if we have not received a challenge from you and you haven t declined the Charge, we will take that as your implicit agreement. If you challenge the Charge or the coupons in question, then decline the Webform. Only the Coupons Team can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. The Coupons Team will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Charge. 24

25 EQUIPMENT RENTAL CHARGE These Charges apply when you rent plastic (green) trays and other equipment. They only apply if you have opted-in to use the equipment rental service. DEALS You will have received a full list of current deposit and hire rates for the equipment type you require when you first sign up to the Equipment Rental service. There is a copy in the appendix, and you can also contact Equipment Control for a copy of the latest rates. VAT is applicable at 0% of the Charge. To input your order for green trays and equipment, simply access COMET system. HOW WILL YOU BE INFORMED OF THE CHARGE? HOW TO CHALLENGE THIS CHARGE You place orders in the COMET system to generate an order number. The Equipment Control team monitor supplier demand and returns of equipment. You are ed an Invoice Summary Report every week detailing the previous week s equipment rental charge. After 30 days you will be invoiced based upon this information this invoice will be sent by Tesco. We encourage you to check this information carefully, to ensure you are happy with its contents. Please contact us ASAP if you have any queries, or if you need any further information please contact the Equipment Control Team via DECMgr@uk.tesco.com. You have 30 days from the date of Invoice Summary Report to challenge the Charge. To do this contact the Equipment Control Team via DECMgr@uk.tesco.com as soon as possible. 25

26 DEALS Promotional Funding is an agreement to fund part of the difference between the previous selling price in-store and the promotional price 26

27 SIMPLE PRICE PROMOTION DEAL Simple Price Promotion Deals are where you agree to fund part or all of the difference between the previous full selling price in-store and the promotional price on a cross out offer. This difference is often called the giveaway value. This funding, in essence, is a short term cost price adjustment based on the sales of the product. DEALS We calculate the giveaway value, and you agree to fund all or part of that value. For example, a product which was 5 is reduced to 3. You may have agreed either a set amount ( 1 per unit) or a percentage (50% of the giveaway value). We will agree the funding (% or ) per unit / case, via the Promotion nomination form. At this stage we are not seeking approval from you for the final amount to be debited. VAT follows the liability of the Product. Funding is agreed excluding VAT, and then invoiced by multiplying the funding by the number of transactions recorded during the promotional period. So if you agreed 1 per unit, and we sold 10,000 units, the total funding invoiced would be 10,000. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL Once the promotion nomination is agreed with your buyer, they will confirm when it has been loaded into Tesco systems. If there are any details you wish to query please contact your Buyer as soon as possible, to resolve this before the promotion goes live in-store. This Charge will appear on the invoice with a unique promotion ID. If you wish to challenge any Promotional Funding Charges, please contact the Invoice Query Team with the details, on ROI.invoicequery@in.tesco.com. They will locate evidence of your approval to the promotional funding in question. If we cannot find the approval, or it is invalid, we will issue a credit note. If you have agreed and we have the confirmation of that, we will share this with you and we won t issue any credit note. 27

28 THRESHOLD % FUNDED (MULTISAVER) Threshold % Funded (Multisaver) Promotions are where you agree to fund part or all of the difference between the previous full selling price in store and the promotional price of a single product (the giveaway value) within a multi-product offer. This funding, in essence, is a short term cost price adjustment based on the sales of the product. DEALS We calculate the giveaway value, and you agree to fund all or part of that value. We will agree the funding (% or ) per trigger sale (sale applicable for the promotion), via the Promotion form. At this stage we are not seeking approval from you for the final amount to be debited. VAT follows the liability of the Product. Funding is agreed excluding VAT, and then invoiced by multiplying the funding by the number of transactions recorded during the promotional period. For example, if a product sells at 1.50 is on a 2 for 2 offer, the giveaway value = 1. If the supplier contributes 50%, the funding equals 50c for every product sale. At the end of the promotion, we will debit you the agreed funding per unit x by the number of sales at till. Using the same example, if 10,000 customers buy the product on the 2 for 2 deal = 10,000 product sales x 50c funding per sale = 5,000 total funding. HOW WILL YOU BE INFORMED OF THE PROMOTION? HOW TO CHALLENGE THIS PROMOTION Once the promotion nomination is agreed with your Buyer, they will confirm when it has been loaded into Tesco systems. If there are any details you wish to query please contact your Buyer as soon as possible, to resolve this before the promotion goes live in-store. This Charge will appear on the invoice with a unique promotion ID. If you wish to challenge any Promotional Funding Charges, please contact the Invoice Query Team with the details, on ROI.invoicequery@in.tesco.com. They will locate evidence of your approval to the promotional funding in question. If we cannot find the approval, or it is invalid, we will issue a credit note. If you have agreed and we have the confirmation of that, we will share this with you and we won t issue any credit note. 28

29 PROMOTIONAL FUNDING RECONCILIATION Promotional Funding Reconciliation Deals apply where there are Complex promotions where our systems cannot calculate the total funding. This trigger funding has to be agreed between both parties in advance, but the final amount is calculated post-promotion and charged using this Deal type in the Webform. It can also be used where we find evidence that we have not properly invoiced you for agreed promotional activity within the year. Errors and omissions mean you still owe us some promotional funding. This funding, in essence, is a short term cost price adjustment based on the sales of the product. DEALS When we find errors and omissions, we will discuss with you what happened and identify where promotional funding is still owed to us. Once agreed with you, the Margin Recovery Team consult with your Buyer and submit the Deal via the Deals and Charges Webform. VAT follows the liability of the Product. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL The Margin Recovery Team and your Buyer will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. This Charge will appear on the Multi-saver debit note with a unique promotion ID. You must actively accept the Deal we will not imply your acceptance after 30 days. If you challenge the Deal details, then decline the Webform. Only the Margin Recovery Team or your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. The Margin Recovery Team and Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 29

30 MISSING PROMOTIONAL FUNDING DEAL Missing Promotional Funding Deals apply where we find evidence that we have not properly invoiced you for agreed promotional activity. Errors and omissions mean we have missed promotional funding that is due to us. We usually review this as part of our joint review of the past year of promotional activity. Where we find discrepancies, we raise debit notes to make any necessary corrections. This funding, in essence, is a short term cost price adjustment based on the sales of the product. DEALS The Deal necessarily varies, depending on what error or omission caused the original promotional funding to be incorrectly calculated. Once agreed with you, the Financial Recovery Team consult with your Buyer and submit the Deal via the Deals and Charges Webform. VAT follows the liability of the Product. HOW WILL YOU BE INFORMED OF THE DEAL? HOW TO CHALLENGE THIS DEAL The Financial Recovery Service will send you the details of the Deal in a Deals and Charges Webform request. This will be an with a link to the Webform. Please accept, challenge or decline the Deal as soon as possible after you receive notification. When you accept, the system will automatically you with a PDF of our agreement. Please keep this for your records. The reference on your Webform will be the same that is quoted on your financial documents, to help you track the Deal. This Deal will appear on the Multisaver debit note with a unique promotion ID and this will reference as Missing Promotional Funding Deal. If you wish to challenge the Deal, please do so within 30 days of our notification . After a minimum of 30 days, if we have not received a challenge from you and you haven t declined the Deal, we will take that as your implicit agreement. If you challenge the Deal details, then decline the Webform. Only the Financial Recovery Team or your Buyer can edit / reissue the Webform. If you decline, please add your reasons for doing so in the comments box. The Financial Recovery Team and Buyer will be informed by that you have declined, and the reasons you gave for doing so. They will follow up with you to discuss, and to correct the details so you can accept the Deal. 30

31 . DEALS A Cost Price Change is a permanent change to the cost of goods, either lower or higher than the last agreed cost price 31

32 CLAIM Cost Price Claims are when you have over-invoiced us an incorrect cost price, and we claim the money back. The Cost Price Claim can be as a result of a cost price change executed through the following methods: The cost price change form (using the Adroit system) The promo nomination form (for promotional prices) DEALS When we receive your invoice, we will check your cost price against the one held in our system. If the cost price we have recorded is less than the price shown on your invoice we will issue you with a Price Claim debit note. We work out the difference per unit / case between your price and ours (your invoice cost minus our recorded cost). We will then multiply this number by the quantity of cases / units delivered. For example, your invoice says 10 / case but we have an agreement for 8 / case as part of a promotion. 100 cases were delivered = a 2 / case difference, multiplied by 100 cases = 200. A total of 200 would then be set-off against your invoice. VAT follows the liability of the Product. We will issue a remittance note, which will detail the Price Claim debit note number and the amount deducted from your account. HOW WILL YOU BE INFORMED OF THE CLAIM? HOW TO CHALLENGE THIS CLAIM All cost price changes are agreed between you and Tesco (your Buyer). When we agree a new cost price, you will receive a system-generated notification confirming the new cost price. If you wish to challenge any cost price changes, please contact the Invoice Query Team with the details, on ROI.invoicequery@in.tesco.com. They will locate your approval to the cost price(s) in question. If we cannot find the approval, or it is invalid, we will issue a credit note. If you have agreed and we have the confirmation of that, we will share this with you and we won t issue any credit note. 32

33 DEALS Charges from third party suppliers we work with, to provide services to you such as audits and artwork checking 33

34 ETHICAL AUDIT CHARGE Ethical Audit Charges are applicable when we require suppliers of Tesco brand products (including other Tesco owned brands such as F+F), loose produce, or suppliers of services to undertake independent ethical audits of their sites. These ethical audits must be conducted by audit bodies and auditors recognised by Tesco. These audits must then be published and made visible to Tesco on the Tesco SEDEX system. All Charges are invoiced directly by the third party audit body. DEALS You agree the cost of the audits and any follow-ups with the audit body. In some cases the audit body may require payment in advance, before the audit. You pay the audit body directly. Variations in the Charges are due to the cost of conducting an audit in each area auditing a production site in Russia may be more expensive than one in England, if the process is more complex or other market conditions vary. The audit body / auditors will determine what VAT is to be charged on their supplies. HOW WILL YOU BE INFORMED OF THE DEAL / CHARGE? HOW TO CHALLENGE THIS CHARGE You ll be notified about the requirement for an audit or re-audit by Tesco. It is then your responsibility to agree Charges with a Tesco-approved audit body. If you choose not to conduct independent ethical audits when requested, or to resolve any issues identified, Tesco would need to understand the reasons and could take the decision not to continue the relationship. However, if you believe something is wrong with the Charge e.g. you ve been charged twice then you should get in touch with your auditor to discuss and resolve. 34

35 ETHICAL ONLINE DATABASE CHARGE The Ethical Online Database Charge is applicable when you join SEDEX (Supplier Ethical Data Exchange). SEDEX is a not-for-profit ethical data exchange organisation, independent of Tesco. It enables suppliers to share ethical workplace data with their customers, including Tesco and many other organisations. This Charge is essentially a membership fee to join SEDEX - an online ethical database organisation used by multiple retailers to manage the supply chain. If you are an own-label supplier, we require you to become a member (with very few exceptions). DEALS The Charge is set by SEDEX depending on the type of membership: For Supplier (B) Members: From 1st June 2016 the annual fee, per site, will be GBP / $95 USD for a basic membership fee, plus local taxes including VAT where applicable. For Buyer (A) and Buyer / Supplier (AB) Members: This type of membership is dependent on the turnover of the company and is set by SEDEX and you as a supplier pay SEDEX directly. Membership options* Sedex has three membership types that reflect the different levels of functionality available in the Sedex system for: Buyers (A Members), Buyer / Suppliers (AB Members) and Suppliers (B Members). MEMBERSHIP CATEGORIES A AB B View and run reports on your suppliers data Enter and share ethical data for your sites; view and run reports on your suppliers data Enter and share ethical data for your sites of employment retailers consumer brands first tier suppliers large manufacturers agents farms and growers factories goverment organisations charities importers service providers small manufacturers production sites HOW WILL YOU BE INFORMED OF THE DEAL / CHARGE? HOW TO CHALLENGE THIS CHARGE You ll be notified about the requirement for joining SEDEX by Tesco. You then pay SEDEX directly. If you choose not to become a SEDEX member, Tesco would need to understand the reasons and could take the decision not to continue the relationship. However, if you believe something is wrong with the Charge e.g. you ve been charged twice then you should get in touch with SEDEX immediately to discuss and resolve. 35

36 SITE AUDIT CHARGE Site Audit Charges cover the cost of audits performed by second party audit service providers. Site audits are required by us, to ensure all supplying sites meet our technical standards. All sites must be audited and approved before you start supplying product, and regular audits occur for as long as you supply to ensure compliance with our high standards. Approval can only be given following a physical inspection (audit) at your production premises. The second party auditor invoices you directly for the Site Audit Charge. DEALS You are notified of the audit requirements by our Technical team, before you start supplying Tesco. For example in the UK / ROI, the Charge for Food audits is currently an all-inclusive flat rate of 750 per day +VAT. The audit body / auditors will determine what VAT is to be charged on their supplies. In some regions, the rate is a daily rate plus expenses. A full list can be found in the Site Audit Charges Matrix in the appendix, including VAT applicability. The variation in the Charge is may be due to the cost of conducting an audit in each area auditing a production site in Chile may be more expensive than one in South Africa, e.g. if the expertise is more scarce or other market conditions vary. We review our second party audit providers, to ensure we re getting the best value for you and for us. HOW WILL YOU BE INFORMED OF THE DEAL / CHARGE? HOW TO CHALLENGE THIS CHARGE You are notified of the audit requirements by our Technical team, before you start supplying Tesco. If the Charge is all-inclusive, you may be invoiced up to 3 months before the audit due date by the second party provider. If the Charge is a daily rate plus expenses, then you will be invoiced after the audit by the second party provider. Passing the audit is a condition of supplying Tesco. However, if you feel something has gone wrong (e.g. you have been charged twice, or charged the wrong rate), please get in touch with the Supplier Helpline on or via Suppliersupport.Product@uk.tesco.com (operating times 9am-5pm Monday to Friday). 36

37 DEALS APPENDIX Further information for you to refer to 37

38 DELIVERY NON-CONFORMANCE The tables set out the cost recovery which may be debited for a non-conformance and the reason under which it will be raised. NON CONFORMANCE REASON NO SHOW / PULL OUT LATE ARRIVAL NON COMPLIANT TRAILER / CONTAINER REJECTED VEHICLE Health & Safety CROSS CHARGE PRICING REASON FOR CHARGE ADV ISED NOT ADVISED FTA or Pull Out Late Arrival Non-Compliant Trailer / Container 100 Rejected Vehicle 100 Non-Compliant Stock or Pallet (Re-work) Non-Compliant Stock or Pallet (Rejected) Barcode / Case Label Re-work Paperwork / PO or Product Not Advised Damaged Stock(On-Site Disposal) 15 per Affected Pallet 5 per Affected Pallet 0.50 per Affected Unit 50 per Clerical Administration 7.50 per Pallet Affected NON-COMPLIANT STOCK OR PALLET (RE-WORK) BARCODE / CASE LABEL RE-WORK PAPERWORK / PO OR PRODUCT NOT ADVISED NON-COMPLIANT STOCK OR PALLET (REJECTED) Breakdown Packsize Issue Packaging Labelling / Barcodes Pallet Issues NON-COMPLIANCE COST RECOVERY REASON DAMAGED STOCK - ON-SITE DISPOSAL CHARGE DEALS TixHi Issues Best Use of Space / Timing Slip Sheet Issue No Open Orders Damaged Stock Vehicle Issue Late Arrival FTA Code Date Double Drop Issue 38

39 DELIVERY NON-CONFORMANCE CHARGE NON-CONFORMANCE COMMUNICATION PROCEDURE DEALS You will be notified daily by when a non-compliant delivery is received from you with a summary being published weekly. Information will include: Tesco order number Date and location of delivery Reason for non-compliance Details of products and quantity involved Photographic evidence of the non-conformance Details of the cost recovery which will be debited The Primary Distribution conformance team work to support improvement in inbound standards. If you have difficulty adhering to these standards, please get in contact with us so we can discuss how best to support you in this area. 39

40 DELIVERY NON-CONFORMANCE CHARGE NON CONFORMANCE REASON ADMINISTRATION FEE ( 50 EA.) REJECTED UNIT COST ( 0.50 EA.) REWORKED UNIT COST ( 0.50 EA.) REJECTED PALLET COST ( 5 EA.) REWORKED PALLET COST ( 15 EA.) DAMAGED COST ( 750 EA. PER AFFECTED PALLET) Pallet Issues Labelling Issues Vehicle Issues Breakdown Pack Issues FULL LOAD COST ( 100) NOTIFIED LATE / FTA ( 50) NON-NOTIFIED LATE / FTA ( 100) DEALS Fumigation Load Issues Packaging Issues Damaged Stock Notified Failed Delivery Non-Notified FTA Code Date Violations Container Filling Issues ASN Issues Barcode Issues Health & Safety Pack Size Issues No Open Orders Infestation Double Drop Issues Slip Sheet Issues Notified Late Delivery Non-Notified Late Delivery TixHI Issues Paperwork Issues Short Delivery Over Delivery SSCC Issues 40

41 SITE AUDIT CHARGE MATRIX VAT is as per the table below ASP COUNTRY STANDARD PER DAY 2 DAY SGS China, Malaysia, Thailand, Indonesia TNFMS 650 (USD) ** China TCFMS 350 (USD) ** Bangladesh, India, Sri Lanka, Vietnam, Cambodia, Pakistan, Thailand, Indonesia 340 (USD) ** Turkey 400 (USD) ** Italy, UK 720 (USD) ** Egypt, Romania, Morocco, Bulgaria, Kenya, Czech Republic, Poland 490 (USD) ** Madagascar 570 (USD) ** Intertek Bangladesh, China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Sri Lanka, Thailand, Vietnam THMS 580 (USD) ** Korea, Taiwan 850 (USD) ** SAI Thailand TPPS / TFMS 13, 850 (THB) ** Spain 871 (EUR)* 1742 (EUR)* Italy 895 (EUR)* 1791 (EUR)* Germany 992 (EUR)* 1984 (EUR)* France 1014 (EUR)* 2028 (EUR)* Netherlands, Belgium, Austria 1040 (EUR)* 2080 (EUR)* Turkey 1483 (LIRA)* 2966 (LIRA)* Other western Europe 1283 (EUR)* 2566 (EUR)* SGS Czech Republic TPPS / TFMS / TNFMS 13, 350 (CZK)* 23, 100 (CZK)* Slovakia 550 (EUR)* 900 (EUR)* Hungary 400 (GBP)* 755 (GBP)* Poland 2070 (PLN)* 3915 (PLN)* Other Eastern Europe TBC TBC * Expenses included, VAT not included ** Excluding country VAT and Expenses VAT is applicable as per the country s rate. In the UK, this is 20%. DEALS 41

42 TECHNICAL RATE CARD Tesco Technical Charges Summary - UK & ROI Food Suppliers (Payable to Tesco) DESCRIPTION FREQUENCY WHEN APPLIED Surveillance Testing Requirements set by product type Risk assessed FIXED CHARGE PER UNIT (SUBJECT TO VAT) Barcode Non-Scan Where applicable In the even on an incident 620 per incident per depot Specification Check Where applicable Product failing specification check 270 per test Product Development Testing / Research Cancellation / Non- Delivery charges against agreed product testing Where applicable Where applicable Supplier requested development / research activity Cancellation / Non-Delivery charges may apply where costs are incurred by Tesco VARIABLE COSTS (SUBJECT TO VAT) Routine test cost range from 5 to 275, however some specialist authenticity tests may be higher (up to approx. 1,000) Category approved activity - NO CHARGE Charge based on actual cost incurred by Tesco COMMENTS Agreement from Category Product Developer will be required for all noncharged activity (cancellation charges may apply, as below) Actual charge will be based on the invoiced cost to Tesco from third party agencies DEALS Tesco Technical Charges Summary - UK & ROI Food Suppliers (Payable to Third Party) DESCRIPTION Site Audit Specification & Artwork Check * Simple product No processing other than cuting, chopping, bottling, freezing, squeezing and no nutritional claims; up to 10 ingredients Medium product Complex product SUPPLIER FSSI FREQUENCY Determined by previous performance Added values / processed products. All in one micing bowl stage, with or without simple protein More than one recope, component, cooking method WHEN APPLIED All sites Ashbury Labelling Per specification / artwork All charges FIXED CHARGE PER UNIT (SUBJECT TO VAT) 750 per day inclusive of expenses Simple product 180; Medium product 240; Complex product 280* Ethical Online Database SEDEX Annually All sites For 8 members plus VAT Ethical Audit Third Party company Risk assessed Medium and high risk sites 200-2,000 VARIABLE COSTS (SUBJECT TO VAT) For A & AB members the charge varies based on the turnover of the business 42

43 TESCO EQUIPMENT COSTINGS FOOD TRAYS Desposit DWELL Charge: 2.80 per tray, which is refundable Rental 0.25 non refundable 0.03 daily NON FOOD TRAYS Desposit FLOWER BUCKETS Desposit DWELL Charge: FLOWER LIDS Desposit TFDOL Desposit 2.80 per tray, which is refundable Rental 0.15 non refundable 1.50 per bucket, which is refundable Rental 0.18 non refundable 0.03 daily 0.50 per lid, which is refundable Rental 0.15 non refundable 2.15 per unit, which is refundable Rental 0.85 non refundable TWPAL TESCO WHEELED PALLET 0.85 per unit DWELL Charge: 0.04 daily TQDP TESCO QUARTER DISPLAY PALLET 0.50 per unit DWELL Charge: 0.02 daily TPMU - TESCO PRODUCT MERCHANDISE UNIT 0.81 per unit DWELL Charge: 0.12 daily WRITE OFF TWPAL 50 per unit TQDP 7 per unit TPMU 73 per unit TFDOL Loss of deposit TUDOL 20 per unit TESCO TRAYS Loss of deposit FLOWER BUCKETS / LIDS Loss of deposit DEALS 43