Asda cuts out the middle man

Asda is to implement a direct sourcing model into its wine category, creating new jobs and the supermarket’s own UK bottling facility.

The move is the result of the supermarket acquiring IPL last year, a procurement business which to date has only been used for Asda’s food sourcing, but will now extend its remit to include wine through the newly-created division, IPL-Wine.

Asda has said that IPL will stretch its current direct sourcing approach and build an independent procurement model which aims to source the majority of Asda’s wine direct from producers.

The supermarket stated that it will “leverage its existing international capability by employing wine specialists across the world to source the best quality wine for Asda.

“Adding people with expertise in wine procurement and logistics at IPL will reduce costs in the supply chain and unlock significant value while also enhancing product knowledge within the Asda/IPL team,” said the Walmart-owned supermarket.

The UK-based bottling facility, which will create even further jobs, will be achieved through a partnership with Vinpack. This development is hoping to reduce the number of shipping containers for the supermarket by 40% while maintaining quality control and reducing costs in its supply chain too.

IPL-Wine will be run by Fraser Thomson under the direction of Nick Scrase, managing director at IPL, and Adrian McKeon, category director for BWS at Asda.

Speaking of the new initiative, McKeon said: “This will enable us to source the very best wine from across the world for our customers and ensure quality is maintained throughout the procurement process.

“Not only is the new model good for the environment, by cutting out costs from middlemen we will be able to deliver a first-class wine offering to our customers at great prices.”

Jane Parkinson, 06.12.2010