Responsible supplier management

Our responsibility

Our production is mainly based on sugar beet grown close to our factories in Denmark, Sweden, Finland and Lithuania. We also use cane sugar from for instance South America, Africa and Asia. No matter whether our raw materials originate from growers in Northern Europe or other parts of the world, we make sure that the suppliers live up to the well-defined high ethical and environmental standards on which we base our own business. Our goal is Best-in-Class risk management.

Our actions

Control of supply chain
At the moment, the European demand for sugar exceeds supply. Therefore, we are currently purchasing more sugar on the world market to guarantee supplies for our customers.  To us, this poses more challenges in terms of ensuring that suppliers of these sugar volumes meet our high ethical and environmental requirements. Even though complete segregation throughout the value chain cannot be ensured, our policy is to know the conditions in the regions from where we source. We handle this by making requirements to the suppliers and by using our risk-based audit programme to check that they are met.

Cooperation on improvements
When we enter into cooperation with a supplier, we not only look at the product but also at our compatibility with the supplier. This means that, in addition to examing the quality of the product, we also assess whether the supplier works according to principles that comply with our position on sustainability. Before starting cooperation, we engage in dialogue with the supplier. We enquire about, and audit, their general routines and examine whether or not they have systems in place to manage health and safety, hygiene, environment and ethics. If that is not the case, and we still believe there is a basis for cooperation, we prepare a realistic plan with the supplier setting out the steps be taken to live up to our requirements. We then follow up with regular audits and provide additional inspiration for improvements.  If we experience that the supplier has no intention of rectifying the circumstances in his production that are incompatible with our sustainability principles, we discontinue the cooperation.

Forging longterm relations
Our cooperation with the suppliers goes beyond control and supervision. We have a close dialogue to ensure continued improvements and offer advice, for instance on environment-friendly and optimum beet cultivation. We find it valuable to create longstanding relations with our suppliers.

Sugar experts
Our close relations with our suppliers have made us experts in cane sugar sourcing – a knowledge we also use to assist our customers. For instance, we are following the GMO debate closely.
In sugar cane production, progress is made towards marketing genetically modified sugar cane. Outside the EU, a similar trend is seen in regards to market transgenic sugar beet. Those are the market conditions that we and our customers must increasingly consider in the future. In 2010, we will decide on additional precautions in relation to GMOs.

Our performance

When we recently had to approve our supplier of Fairtrade organic sugar in South America, we paid a visit to the small factory. During the visit, we presented the producer with various demands, for instance to improve health and safety at work and product safety. By our second visit, the factory had already implemented significant improvements.
In connection with trial purchase of organic sugar from a producer in Asia, we wanted to visit the factory to examine the local conditions. The factory was reluctant to receive our auditors allowed and during the visit, our impression of their business methods was so poor that we chose to discontinue our cooperation.