Responsibility for people and markets

Metro Group considers its contribution to the economic and social development of the local economies an important factor for the sustained success of its Asian engagement. To this effect, the retail group seeks to cooperate closely with local industries, governments and non-profit organisations in all countries. Open, cross-cultural exchange of experience, expertise and management solutions benefits all parties involved.

Whether it means promoting environmentally and socially compatible products, saving natural resources or training specialist and management staff: at Metro Group, CSR forms in integral part of our value-added chain. Against the backdrop of rising international competition, CSR contributes to the sustained development of industries and society.

Private-public partnership in India

One example for Metro’s concept of Corporate Social Responsibility is the company’s commitment in India. Hot climates and temperatures that sometimes rise to over 50 degrees centigrade often make it difficult to maintain an unbroken cold chain. Normally, between 25 and 40 % of the fresh produce perishes in the supply chain, on the way from the producer to the consumer. The damage is on the farmers’ side, because intermediate traders often only pay them if their products are actually purchased by end customers.

Reliable, long-term relationships are crucial for Metro Group, which sources up to 90 % of its assortment directly from local suppliers in the expansion countries. The retail group pays for all merchandise supplied by the producers and thereby provides them with a reliable source of income.

Metro Cash & Carry opened its first two wholesale stores in Bangalore in autumn 2003. Right from the beginning, it was clear that the company to some extent would have to establish the necessary supply and purchasing structures on its own initiative. Therefore, Metro Group entered into a private-public partnership with Deutsche Investitions- und Entwicklungsgesellschaft (DEG), a subsidiary of the KfW banking group, and set up training programmes for local farmers and fishermen.

In the context of this project, more than 40,000 shepherds and fishermen so far have been trained in the fields of veterinary medicine, hygienic breeding and efficient product processing. To this effect, state-run agricultural training centres were modernised, among other measures. Programmes in up-to-date fishing and processing methods helped to contain the problem of overfishing, and to raise awareness for quality and environmental protection.

Moreover, veterinaries working on behalf of Metro Group have so far vaccinated nearly one million sheep against foot and mouth disease and other animal diseases. These comprehensive programmes, which are typically run in cooperation with local authorities and universities, have a direct positive impact on the working methods and sales opportunities of the farmers and fishermen – beyond their role as Metro-suppliers. Their enhanced ability to meet hygienic standards and produce high-quality products boosts their competitiveness in general, including with other purchasers than Metro Group.

In September, Metro Cash & Carry started conducting first seminars for fish farmers in Pakistan. Besides information on better breeding methods and hygiene, the training programme also includes a short introduction to Metro Cash & Carry and its business model.

Metro Cash & Carry offers ­customers many benefits

Unlike other international retail chains operating in Asia Metro Cash & Carry does not address private end consumers. The company targets commercial customers such as retailers, restaurants and hotels. The marketing concept of Metro Cash & Carry offers numerous benefits for that commercial clientele. Metro’s wholesale outlets gives the access to a vast assortment of high quality, available at any time, thus reducing the need to purchase items in advance and store them on their own premises. Commercial customers find whatever they need quickly and at fair prices. Therefore, they can operate more efficiently, reduce their costs and offer merchandise of higher quality.

Quality and freshness are the top priorities of Metro’s commercial target group worldwide. Metro Group is championing compliance with high and internationally recognised standards both, at its own stores and also in the complex production chain. Where efficient structures of modern mass distribution are lacking or insufficient, the retail group contributes to their establishment.

The Metro Cash & Carry quality control system covers all steps – from the producer to the shelves of the wholesale stores. Only products free from defects reach the shelves. The company’s quality management enforces the EU standards established in 2006 at all Metro locations, not only within the European Union. Metro Cash & Carry is thus contributing to improving the food supply in Asia while at the same time strengthening the competitiveness of its customers.

In China tab water quality is often of poor quality. Therefore, the Metro wholesale stores sell salad which is already washed. Moreover, the commercial customers get professional assistance regarding the cold-chain management. On offer are cooling bags for transport, for example.

In Hefei, the capital of the Chinese province Anhui, Metro Cash & Carry is actively promoting a more efficient and sustainable agriculture. A whole series of high-quality agricultural products such as fruit, vegetables or poultry originates from this region near the Yangtze delta. To further improve the sales opportunities for these products – also at the international level – Metro Cash & Carry offers training programmes specifically developed for the local producers and informs about relevant issues of modern agriculture. Since in particular the soil and water quality are crucial for high-quality foods, the courses tackle environmental aspects too. Independent institutes monitor compliance with the requirements specified by Metro Cash & Carry at local farms. The Chinese Ministry of Commerce and the local agricultural agencies support this commitment.

Support for EurepGAP certification

With the objective of supporting fruit farmers in their efforts to obtain certification according to the internationally recognised EurepGAP quality standard, Metro’s subsidiary in Vietnam signed a cooperation agreement with the Vinh Long province located in the Mekong delta in May. This cooperation also involves the Vietnamese Ministry of Trade (MOT) and German Technical Cooperation (GTZ). The project aims to enable all involved in the supply chain to meet the technical requirements for certification pursuant to EurepGAP. Among others, EurepGAP requires producers to reduce the use of pesticides, or to act responsibly with a view to the safety and health of their staff.

In order to sell fruit not only as local suppliers of Metro Cash & Carry but also on the world market, the Vinh Long farmers are trying to obtain an international certification for their grapefruit farming. Promoted is the Nam Roi grapefruit cooperative in Binh Minh Ward, which has long been famous for its products. At present, the focus of the programme also lies on three further fruit types with great potential for export: mangos, dragon fruit (pitahaya) and litchis.

Cooperation for humane ­working conditions

In addition to its commitment to high-quality and safe foods, Metro Group is committed to monitoring humane working conditions in its international purchasing activities. It is one of the founding members of the Business Social Compliance Initiative (BSCI), a cooperation of European retailers with the objective of ensuring compliance with basic labour rights in the supply chain. Among other things, the BSCI code of conduct specifies an environmentally friendly disposal of waste, handling of chemicals in a way that does not affect humans and the environment as well as wastewater treatment.

In recent years, the BSCI members time and again experienced that individual suppliers did not comply with the warranted standards. Against this backdrop, a globally applicable monitoring procedure that will be gradually introduced for all merchandise categories has been drafted. The corresponding supplier audits do not fall within the responsibility of the BSCI members but are performed by independent external auditing companies.

Not all shortcomings the audits reveal can be changed from one day to the next. Many are in part culturally conditioned. Aware of this fact, BSCI member companies do not only commit to auditing their suppliers but also to supporting the introduction of better practices. Since a social audit only gives a momentary snapshot, the initiative is now increasingly treading new paths in the cooperation with suppliers, governments and local non-governmental organisations. Customised coaching, the organisation of round tables as well as an intensive sensitisation contribute to giving suppliers realistic chances for improving the working conditions at their companies in the long term.

Qualification and career opportunities

Throughout Asia, Metro Group plans to further extend its store network. As an employer for local people, it has already become an important economic factor. In Asia, Metro Cash & Carry employs more than 13,000 people today. The company relies on local staff, and offers continuous qualification in order to fill management positions.

To be able to accommodate the growing demands in terms of know-how and service in the Asian markets, Metro Group opened a cross-cultural training centre in Shanghai back in 2004. Under the roof of this House of Training, employees are prepared for work at one of the wholesale stores of Metro Cash & Carry. For the employees, the training centre offers open up additional perspectives for an international career at Metro Group.