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					                      Supplier
                                                                         CONFIDENTIAL




                      Handbook
                   For Food, Drink, Petcare, Household and Health & Beauty




sainsburys.co.uk
    1                          sainsburys.co.uk
                     sainsburys.co.uk
    Contents                                                                   CONFIDENTIAL


    Amendment history

     Issue no.     Date                         Change
     1.0           30 Nov 2009                  New




    This document is effective from 4 February 2010




     Section No.   Section name                                    Page No.
     1.0           Introduction                                           5
     1.1           Purpose of this Handbook                                5
     1.2           Confidentiality                                         5
     1.3           Copyright                                               5
     1.4           Contact details                                         5
     2.0           About us                                               6
     2.1           Company overview                                        6
     2.2           Company goal and values                                 7
     2.3           Roles in trading                                        8
     3.0           Managing your account with us                         10
     3.1           Setting up your account                               10
     3.2           Delivery paperwork                                    10
     3.3           Invoicing                                             12
     3.4           Payment terms                                         14
     3.5           Understanding your payment                            14
     3.6           Raising a query about a payment or a deduction
                   from a payment                                        14
     3.7           Cost-price file exchange                              15
     3.8           Trading finance platform                              15
     3.9           Promotional and marketing costs                       16
     3.10          Electronic statements                                 16
     4.0           Systems information                                  17
     4.1           General systems information                            17
     4.2           Data exchange and EDI                                  17
     4.3           Data synchronisation                                 20
     4.4           Emptorius                                            20
     4.5           Complaints Analysis and Response System (CARES)       21
     4.6           Performance measuring tools                          22
     4.7           E-sourcing                                           23
     4.8           INSPIRE                                              23
     5.0           Trading with you                                     24




2
    Contents                                                                    CONFIDENTIAL




    Section No. Section name                                         Page No.
    5.1         Code of conduct for working in a socially responsible way
                (code of conduct)                                         24
    5.2         Applying and monitoring these principles                  26
    5.3         Environment                                               27
    5.4         Business continuity                                       27
    5.5         Our technical requirements for you                        28
    5.6         Product packaging controls                                30
    5.7         Conducting business with us                               30
    5.8         Hospitality and gifts from suppliers                       31
    5.9         Additional documentation                                  32
    6.0         Delivering products                                       34
    6.1         Forecasting                                               34
    6.2         Ordering                                                  34
    6.3         Acceptance specifications                                 35
    6.4         Product withdrawals, rejections, claims and wastage       44
    6.5         Non-standard delivery requirements                        47
    7.0         Getting it right – delivering products direct to stores 57
    7.1         Receiving products in stores through the retail
                 stock system (RSS)                                       57
    7.2         Goods delivered by couriers                               57
    7.3         Returns from stores                                       57
    7.4         Advance Shipment Notifications (ASNs)                     58




3
    Appendices                                                               CONFIDENTIAL




    Appendix 1    Contact details
    Appendix 2a   Glossary of terms
    Appendix 2b   Glossary of systems
    Appendix 3    Crate drop-in cards
    Appendix 4    Printing barcodes – checklist
    Appendix 5a   Delivery notes – format
    Appendix 5b   Standard delivery note – example
    Appendix 6    Pallet label requirements
    Appendix 7    An example of a pallet label
    Appendix 8    Details of the depots
    Appendix 9    Example proof of delivery (POD) paperwork
    Appendix 9a   POD standard deliveries – signed, stamped receiving note
    Appendix 9b   POD chilled deliveries – signed, stamped delivery note
                  (including Wave Number)
    Appendix 9c   Red Prairie Depots – signed, stamped receiving note
    Appendix 9d   POD direct to store deliveries – RSS delivery note
    Appendix 10   Supply chain temperature requirements
    Appendix 11   Common error messages for rejected EDI invoice files
    Appendix 12   Index of deduction codes as they will appear on your
                  remittance advice
    Appendix 13   Documents that are incorporated into your Trading Terms
                  with us
    Appendix 14   Main Trading Terms




4
1    1    Introduction                                                                                                  CONFIDENTIAL


    1.1   Purpose of this Handbook
          This Supplier Handbook (the Handbook) is designed to help you follow our processes and procedures when you trade with
          us. Your Trading Terms with us comprise the Handbook (specifically appendix 14) and Conducting Business with Sainsbury’s.

          We strongly recommend that the relevant people in your organisation read these documents, which have all been sent to you.
          Please destroy all previous versions of these or equivalent documents.

          You can navigate around this Handbook easily by clicking on the links in the Index, which take you to the relevant section.
          Some additional external documents and web pages are also referenced where more detailed information is available for you.

          Whilst our Quick Start Guide summarises some important parts of this Handbook, it is intended only as a convenient quick
          reference for you and does not form part of our Trading Terms. In the event of any inconsistencies between the Quick Start
          Guide and this Handbook, the Handbook prevails.

          Our Trading Terms incorporate and comply with our obligations under the Groceries Supply Code of Practice (the
          Code). In the unlikely event that any part of our Trading Terms is inconsistent with the Code, the Code shall prevail.

          In accordance with the Code’s principle of “fair dealing”, we agree to deal with you at all times in good faith, without
          distinction between formal and informal arrangements, without duress and in recognition of your need for certainty as
          regards the risks and costs of trading, particularly in relation to production, delivery and payment issues. In return, we
          expect you to deal with us at all times in good faith and without distinction between formal and informal arrangements.

          If any further agreements or arrangements in relation to our Trading Terms are proposed orally, you must confirm the
          proposal in writing within 24 hours and, if we agree, we will confirm in writing within three working days of our agreement.

          In trading with us, you are deemed to accept our Trading Terms unless you raise any issues at supplier.comms@sainsburys.co.uk
          or with your Buyer.

            Key requirements are shown in boxes like this one. You must achieve all the requirements, unless we say
            otherwise in writing. Please note that not all requirements are highlighted in boxes and it is important that
            you read all the documents comprising our Trading Terms.



    1.2   Confidentiality
          This Handbook and its contents remains our property and as such must be treated as confidential. The contents must
          never be disclosed to any other party either in part or in whole without our prior written consent, except to the extent that
          you may be required to do so by law or a court order. Please also see the confidentiality point in our Main Trading Terms.



    1.3   Copyright
          The copyright of this Handbook belongs to us and no part shall be reproduced without our written permission.



    1.4   Contact details                                             Registered company number: 3261722

          Registered office address – United Kingdom:                 Switchboard: (0044) 020 7695 6000
          Sainsbury’s Supermarkets Ltd                                Fax: (0044) 020 7695 7610
          33 Holborn
          London EC1N 2HT                                             Websites:
          United Kingdom                                              Customer website: http://www.sainsburys.co.uk
                                                                      Corporate website: http://www.j-sainsbury.co.uk




5
2   2     About us                                                                              CONFIDENTIAL


    2.1   Company overview
          J Sainsbury plc was founded in 1869 and today comprises 529 supermarkets
          and 300 convenience stores. It jointly owns Sainsbury’s Bank with Lloyds
          Banking Group and has two property joint ventures with Land Securities Group
          PLC and the British Land Company PLC.

          The Sainsbury’s brand is built upon a heritage of providing customers with
          healthy, safe, fresh and tasty food. Quality and fair prices go hand in hand with a
          responsible approach to business. Sainsbury’s stores have a particular emphasis
          on fresh food and we strive to innovate continuously and improve products in
          line with customer needs.

          We currently serve over 19 million customers a week and have a market share
          of around 16%. Our large stores offer around 30,000 products and we offer
          complementary non-food products and services in many of our stores. An
          internet-based home-delivery shopping service is also available to 88% of
          UK households.

          Corporate objectives

          Our Recovery to Growth plan started in March 2007 and has five areas of focus:

          Great food at fair prices: To build on and stretch the lead in food. By sharing
          customers’ passion for healthy, safe, fresh and tasty food, we will continue to
          innovate and provide leadership in delivering quality products at fair prices,
          sourced with integrity.

          Accelerating the growth of complementary non-food ranges and
          services: To continue to accelerate the development of non-food
          ranges and services following the principles of quality and value and
          to provide a broader shopping experience for customers.

          Reaching more customers through additional channels: To extend
          the reach of our brand by opening new convenience stores and
          developing the online home-delivery operation.

          Growing supermarket space: To expand our store estate, actively
          seeking and developing a pipeline of new stores and extending the
          current store portfolio to provide an even better food offer while
          also growing space for non-food ranges.

          Active property management: The ownership of property assets
          provides operational flexibility and the exploitation of potential
          development opportunities that will maximise value.

          These areas are underpinned by our strong heritage and brand,
          which consistently sets us apart from major competitors.




6
                                                                                around the world and sell in
                                                                                the UK, we have to show...                            RESPECT FOR OUR
                                                                                RESPECT FOR OUR                                       ENVIRONMENT
                                                                                ENVIRONMENT
               2

               2.2
                       About us continued

                       Company goal and values                                                                 OUR
                                                               At Sainsbury’s we will deliver an ever-improving quality shopping

                                                                                                               COMPANY
                                                               experience for our customers, with great products at fair prices.
                                                               We will exceed customer expectations for healthy, safe, fresh and
                                                                                                                                              CONFIDENTIAL




                                                               tasty food, making their lives easier every day.

                                                                                                               VALUES
                                     By playing an active role in
                                     the community that we serve
  an active role in                  we are…
 unity that we serve
                                    MAKING A POSITIVE
NG A POSITIVE                       DIFFERENCE TO OUR
 ENCE TO OUR                        COMMUNITY                                                                                               All this is
                                                                                                                               The commitment of our possible through th
                                                                                                                                            commitment of
                                                                                                                               colleagues makes Sainsbury’s...our colleague

MMUNITY                                                                    The commitment of our possible through the
                                                                                        All this is                                         so we make Sainsbury’s...
                                                                                        commitment of
                                                                           colleagues makes Sainsbury’s...our colleagues
                                                                                         so we make Sainsbury’s...            A GREAT PLACE
                                                                           A GREAT PLACE                                      TO WORK
                                                                           TO WORK
NG                                                                                                       As a leading food retailer
                                                                                                         we focus on being...
 TY
                                                         Because we source from                          BEST FOR
                                                                                                         FOOD AND
                                                         around the world and sell in
                                                         the UK, we have to show...


                                                         RESPECT FOR OUR
                                                         ENVIRONMENT
                                                                                                         HEALTH



                                                                                        OUR
                               As a leading food retailer
                               we’re committed to…


                               SOURCING
                               WITH INTEGRITY
                                                                                                                       Because we source from
                                                                                                                       around the world and sell in



                                                                                        COMPANYFOR OUR
                                                                                                                       the UK, we have to show...


                                                                                             RESPECT
                                                                                             ENVIRONMENT

                                                                All this is             VALUES
                                                   The commitment of our possible through the
                                                                commitment of
                                                   colleagues makes Sainsbury’s...our colleagues
                                                                  so we make Sainsbury’s...

                                                   A GREAT PLACE
                                                   TO WORK                                 visit:
                       To learn more about Sainsbury’s corporate responsibility programme, visit
                       http://www.j-sainsbury.co.uk/cr
                       http://ww.j-sainsbury.co.uk/cr




                          By playing an active role in
                          the community that we serve
           7              we are…

                         MAKING A POSITIVE
    2     About us continued                                                                                      CONFIDENTIAL


    2.3   Roles in trading
          These teams will support you at the Holborn Store Support Centre:


                                                                      Category
                                                                       Planner
                  CEO                             Category                                 Product
                                                  Manager                                Technologist

                        Trad Dir
                                                    Sainsbury’s operates a ‘category centric’ structure.
                                                     This means all key roles within the category are
                                                               situated next to each other.
                                    BUD
                                                                                                 Category
                                                           Buyer                                 Assistant
                                                                              Range
                                                                              Planner
          Core trading roles
          Chief Executive Officer (CEO)
          Responsible for executing strategy, in agreement with the Board.

          Trading Director (Trad Dir)
          Has overall responsibility for the Trading Division.

          Business Unit Director (BUD)
          The Business Unit Director is responsible for the strategy and direction of a Business Unit team within
          the Trading Division.

          Category Manager
          The Category Manager (also known as Senior Buyer) is responsible for driving category direction within
          the corporate framework, and leads an operationally efficient category team to deliver the budget within
          the framework of the corporate goal and CR agenda.

          Category Planner
          The Category Planner owns the end-to-end development of category plans. They are also the marketing
          interface for the entire team, including all marketing activity relating to the category. You should consult
          the Category Planner for all your key marketing activity with us.

          Product Technologist
          The Product Technologists are aligned to their trading team colleagues and act as the category experts.
          They are responsible for our brand and ensure that our products are tasty, safe, legal and fit for purpose.

          Buyer
          The Buyer is responsible for selecting and buying the range as well as managing the overall working
          relationship with you, and is your main point of contact.

          Range Planner
          The Range Planner is responsible for creating the optimal range in the allocated store space, including
          how product is displayed on shelf. They are supported by a Central Ranging Team in all key initiatives,
          i.e. range reviews.

          Category Assistant
          The Category Assistant is responsible for setting up new lines and suppliers, supporting the Buyer with
          general administration duties, and is also a key point of contact for you.


8
    2   About us continued                                                                                   CONFIDENTIAL


        Other people you may need to contact:

        Supply Chain Controller
        The Supply Chain Controller manages stock from you to our depots. They will work closely with you
        to ensure the best customer availability of your products, in the most effective manner possible.

        Supply Chain Forecaster
        The Supply Chain Forecaster is the team expert on sales forecasting. This is then translated into
        orders via the controller.

        Product Developer
        The Product Developer is responsible for all aspects of product development, design, artwork,
        packaging, customer panelling and sustainable sourcing.

        Product Safety
        This team manages the product safety policy for suppliers, logistics and retail. The team works to
        provide formal product safety approval for own-brand products.

        Supplier Performance and Brand Protection Team
        If you supply our own-brand products, this team provides expert advice and support to you on
        complaints, KPIs, third-party certification schemes, specification management and our technical
        policies, with overall responsibility for due diligence systems.

        The Food and Innovation Centre
        This team manages quality assessment activities across our own-brand product range, including
        routine product sampling, benchmarking and customer panelling. It is also responsible for the
        programme of food-based events for internal and external audiences.

        Product Quality Inspectors (PQI)
        Operating in the Produce and Meat, Fish and Poultry categories, the PQI team evaluates the quality
        of our products throughout the supply chain, working mostly in depots and at our suppliers’ sites.

        Product Quality Complaints Team
        This team works with Product Technologists, stores, the Careline and suppliers in order to resolve
        customer complaints in a timely and constructive manner.

        Finance: invoice payment queries
        All your invoice payment queries are dealt with by a dedicated team from our Finance Operations
        department. If you have any queries regarding payment for goods supplied to us, contact our
        Supplier Queries team at supplierqueries@sainsburys.co.uk or on 0845 603 6287.




9
3    3     Managing your account with us                                                                   CONFIDENTIAL


     3.1   Setting up your account
           These are the initial requirements before we can start working together:

           If you are a new supplier, you must send to your Buyer…
           l A completed request for information form

           l An original bank paying-in slip

           l Your company bank details on original company headed paper, signed by two

           company directors
           l A signed and completed executive summary form

           l A generic email address at your organisation (e.g. sainsburys@cocacola.com). This will

           be used by our finance team to send you, among other things, automatic notifications of
           debit deductions.

           Check you have received from your Buyer…
           l Confirmation of your unique Sainsbury’s supplier code (e.g. A1234)

           l Confirmation that your bank details have been set up by Sainsbury’s Supplier Setup

           l Confirmation that you have been successfully set up to transmit and receive EDI messages

           l A Cost-price File Exchange starter pack.



           Troubleshooting
           l Your Buyer is your primary contact with us. Contact your Buyer in the first instance if you

           need help.
           l If you are not receiving payment for invoices submitted, but have been told by your Buyer

           that you have been successfully set up to transmit EDI invoices, contact our Supplier
           Queries team on 0845 603 6287 or at supplierqueries@sainsburys.co.uk
           l If you have begun to trade with us, but are not receiving emailed debit notes, EDI

           notifications or purchase order notifications, email supplier.copies@sainsburys.co.uk to
           check that the generic email address supplied to us by your Buyer is correct on our system.



     3.2   Delivery paperwork

            You must provide and collect the correct paperwork when you deliver to us.
            Please read this section carefully and contact our Supplier Queries team
            (0845 603 6287) if you are unclear on any of it.

           When you deliver to us, your driver must hand over paperwork at the store or depot.
           Once your delivery has been receipted by us, your driver must collect paperwork from
           that store or depot to prove that the delivery has taken place and to record exactly what
           has been delivered. This paperwork protocol can be described most simply like this:

            You must give us with every delivery: a delivery note

            You must take away from us with every delivery: a proof of delivery
            (a signed and stamped receiving note or a signed and stamped delivery note)

           These two types of paperwork must be presented and taken away without exception. The
           specific format for these two pieces of paperwork varies depending on the product you
           supply and whether those goods are delivered to one of our depots (most suppliers do
           this) or directly to one of our stores. The paperwork rules are explained below:




10
     3   Managing your account with us continued                                                           CONFIDENTIAL


 3.2.1   Depot deliveries
         For deliveries into all depots the delivery note must include:
         l your name, address and the supplier alpha code allocated to you by us

         l our purchase order number for that delivery – in bold

         l the unique 8-digit delivery number for that delivery – in bold

         l product descriptions, DCPs and case volume (listed in order of DCP)

         l the unique pallet identification numbers

         l quantity of pallets delivered

         l a minimum 10cm x 4cm space – for us to stamp

         l space for three signatures.



         (Appendices 5a and 5b show the table of information that must be included and an
         example delivery note)

         The proof of delivery paperwork for depot deliveries is a copy of the delivery note, signed
         and stamped by us. Your driver must collect the signed and stamped receiving note before
         he leaves the depot.

         3.2.1.1 Chilled depot deliveries – as 3.2.1, but:
         l the delivery note must also include the product delivery wave (the time slot you have been

         given for delivery)
         l the driver will collect the proof of delivery when they next make a delivery, rather than

         at the time the delivery is made.

         3.2.1.2 Deliveries to Red Prairie managed depots (Red Prairie is our new Warehouse
         Management System) – as 3.2.1, but:

         The proof of delivery may be either a signed, stamped delivery note, or a signed, stamped
         receiving note.



3.2.2    Deliveries direct to stores – as 3.2.1, but:
         l the delivery note number must be in large type on the delivery note and easy to spot
         l the delivery note must list SKU numbers
         l the proof of delivery is an RSS delivery note that will be printed by the store. The RSS

         delivery note must be collected and taken away by the driver on the day of delivery and
         on leaving the store you will receive an automated acknowledgement of receipt.
         (Appendices 9a, b, c and d show examples of proof of delivery paperwork for each type
         of delivery)

3.2.3    Delivery rejections
         Rejections at all locations are recorded on the proof of delivery. We will write the reason for
         rejection on the proof of delivery (for example, ‘ten cases of bananas rejected as damaged’).

3.2.4    Why do I need a proof of delivery?
         Sometimes suppliers invoice for a different quantity of goods to that which has been booked
         in at our store or depot. If an invoice contains more cases than were booked in, we will
         automatically make a deduction from the payment of that invoice. If an invoice is for an
         entire delivery, but that entire delivery has not been booked in at our store or depot, a




11
     3     Managing your account with us continued                                                         CONFIDENTIAL


           deduction will be made from the payment of that invoice for the value of that full delivery.
           Our target resolution timescale is ten working days or less, dependent on the type of query.

            If you ever want to challenge such a deduction, you need to provide an appropriate
            proof of delivery to back up your claim.

           We will only repay such deductions if a valid proof of delivery can be produced.

           3.2.5 Returns from stores (if product has been booked into that/those store(s))
           It may be necessary to return stock to you that has been receipted into one of our stores. In
           such a circumstance you will be contacted by your Buyer, who will detail the action that you
           need to take.

           3.2.6 Returns from depots
           Your Buyer may request that you uplift stock from a depot. This is done using an EDN
           (Electronic Delivery Note) and you will need to arrange for the stock to be collected from
           the depot. The EDN is a depot-generated transaction that details the stock being booked
           out from the depot – and transfers ownership of that stock to the supplier on collection.



            If we reject product for quality reasons, you must collect the rejected product within
            24 hours of the EDN being issued.

           Where we make returns from one of our stores or depots, we may charge you for this.
           Explanations of these charges are outlined in the Conducting Business with Sainsbury’s
           document.

             You must provide and collect the relevant documents, as detailed above, when
             delivering goods to us.

             IMPORTANT: You must invoice for goods – even if they have been returned (i.e.
             invoice as per the proof of delivery – in accordance with section 3.3). We will make the
             appropriate deductions for returned stock on your behalf.



     3.3   Invoicing

            You must comply with our invoicing requirements, which are set out in this section of
            the Handbook.

            You must be EDI enabled to act as a supplier for us and use EDI for the exchange of
            all purchase orders, delivery information, cost files and invoices with us. Paper
            documents will not be accepted as alternatives.

           You must:
           l Invoice using EDI (Electronic Data Interchange)

           l Tell HM Revenue and Customs office that you will be invoicing using EDI

           l Always invoice after goods have been delivered

           l Invoice based on the contents of the signed and stamped proof of delivery (not the

             purchase order, which may differ from what has actually been delivered)
           l Invoice with correct delivery location, purchase order number and receipt value (receipt

             value as per the proof of delivery).


12
     3   Managing your account with us continued                                                             CONFIDENTIAL

         Invoicing for chilled produce – as 3.3, but:
         l The purchase order number must appear on the invoice twice: once in the order number

           field and again in the common reference field.

         3.3.1 EDI invoicing for small suppliers
         Fully integrated EDI is the preferred EDI solution for organisations that supply us. Integrated
         EDI, however, may not be cost-effective for suppliers of few SKUs who are not already active
         on EDI. A more cost-effective web-based solution is available for such suppliers, by
         agreement with us, which allows users to receive orders and send invoices using the internet.

         For more information on this option, contact EDI.queries@sainsburys.co.uk – or telephone our
         switchboard and ask for the EDI team.

         3.3.2 What’s so good about EDI invoicing?
         Effective use of EDI invoicing leads to:
         l Guaranteed timely receipt of invoices

         l Automatic invoice matching

         l Prompt payment of matched invoices

         l Complete invoicing audit trail.



         3.3.3 EDI common errors and rejections
         The structure and format of an EDI invoice must comply to specific rules for it to be processed
         and matched by us (your IT department may know more about this!). EDI invoices that do not
         comply to these rules cannot be paid by us.

         We have set up a validation system that will send you an automated email response if your EDI
         invoice fails the structure and format rules. The email contains an explanation of why a file has
         failed in any particular circumstance and will be sent to the generic email address mentioned in
         section 3.1. We’ve put some examples of rejection messages in Appendix 11 – but you may want
         to leave these to your IT department!

         If you need help understanding a rejection message that you receive by email, contact our
         Supplier Queries at supplierqueries@sainsburys.co.uk or on 0845 603 6287.

           IMPORTANT: Put the purchase order number in the purchase order field of your EDI invoice
           file. (IT bit: the PO field is in the ODD segment and ORNO element of your EDI file.)

         3.3.4 Deductions from invoices (when an invoice does not match a receipt)
         During the invoice matching process, we will work to the assumption that our own data is
         correct. We will therefore automatically make a deduction from your invoice payment where:
         l The invoiced cost price for a SKU is higher than the price held in our cost price database for

           the date of delivery (cost price debit deduction)
         l The quantity receipted by us for that delivery is lower than the quantity on the invoice

           (quantity debit deduction)
         l No delivery corresponding to the purchase order number has been receipted by us (full

           delivery debit deduction).

         3.3.5 Remittance advices
         We will send monthly remittance advices to your designated fax number. If you are signed
         up to the trading finance platform (see section 3.8), you can view your remittances online.




13
      3    Managing your account with us continued                                                        CONFIDENTIAL


           3.3.5.1 Deductions for fees owed to us
           We will deduct the following fees from your monthly remittance:
           l Promotional fees

           l CARES claims (CARES is covered in detail in section 4.5)

           l EDN changes (EDNs are covered in section 3.2.6)

           l Primary distribution charges (if you use our primary distribution service).

           See section 3.9 for a more detailed explanation on how these fees are invoiced.

           Appendix 12 shows a list of the codes that identify each type of deduction as they will be
           shown on your remittance advice.

     3.4   Payment terms
           Our standard payment terms are no later than the last day of the month following the month
           of invoice. The terms start from the later of invoice date and date of receipt by us. We pay
           you via BACS with cleared funds arriving in your bank account no later than two working days
           of the payment date. For example, we will pay invoices dated 1st to 31st March no later than
           30th April – and cleared funds will arrive in your account no later than 2nd May.

           All funds that are not in dispute will be paid to our payment terms.

     3.5   Understanding your payment
           Our Supplier Queries team deals specifically with queries from suppliers relating to
           payment for goods or services. They are a specialised team who will try to resolve
           your payment queries either via telephone (0845 603 6287) or via email at
           supplierqueries@sainsburys.co.uk

     3.6   Raising a query about a payment or a deduction from a payment
           There are rules for the format in which each type of payment query must be submitted to
           our Supplier Queries team. Some are best raised by telephone, others must be submitted
           by email and in a specific format.

           These rules are detailed in the Sainsbury’s Supplier Queries: Help us to Help You pack. Ask
           your Buyer (or our Supplier Queries helpline) for a copy before you submit your first query.

           If you submit a query in the wrong format, we will contact you and ask you to resubmit your
           query in the correct format.

           3.6.1 Cost price debit deductions
           The Supplier Queries team can only reverse a cost price debit deduction if authorisation is
           given by our relevant Buyer via a Cost Price Debit Reversal Form. You can get one of these
           forms from your Buyer, or from our Supplier Queries team on 0845 603 6287.

           3.6.2 Quantity debit/ full delivery debits: The Supplier Queries team can only reverse a
           quantity debit deduction or a deduction for an entire delivery if a signed, stamped proof of
           delivery (see section 3.2.4) is provided that proves that the deduction should be reversed.
           A reversal cannot be made without a POD.

             IMPORTANT: Do not save up debit deduction queries. Send them to us on a rolling
             basis as soon as you are aware of them.




14
      3    Managing your account with us continued                                                           CONFIDENTIAL


     3.7   Cost-price file exchange (CFE)

           3.7.1 What is CFE?
           CFE is a weekly process through which we check the latest cost prices in our cost-price
           database against those held in your invoicing system. Where CFE is used effectively, you will
           experience zero cost price debits (see section 3.6.1).

            You must sign up to the CFE programme.

           A CFE file is sent via EDI – just like your invoices. You must send that file twice a week
           (depending on your EDI provider, CFE can generally be set up to transmit these files
           automatically). CFE works by spotting cost-price discrepancies before goods are receipted
           (e.g. booked in and valued as stock) or invoiced – and so it ensures that the cost price at
           which stock is valued matches the cost price at which it is invoiced.

           Contact your Buyer for a CFE starter pack – including instructions on how to join up to the
           programme.

           If you have any queries while using CFE, contact our dedicated CFE team at:
           CFE.Team@sainsburys.co.uk



     3.8   Trading finance platform (TFP)

           3.8.1 What is TFP?
           TFP is an internet-based system that provides you with the option to view approved
           invoices, debit notes, remittance advices and payment dates online – giving you complete
           visibility of your receivables.

           3.8.2 TFP and early invoice settlement
           If you sign up to the flexible payment functionality, TFP also allows you to ‘sell’ invoices to
           the Royal Bank of Scotland (at a discount to full face value) at any point before the invoice
           due date. If you choose not to use the flexible payment option, the full value of the invoice
           will be paid as normal to your standard payment terms (see section 3.4).

           This flexibility in payment timing allows us to support your cash-flow needs and lets you
           benefit from our borrowing power.

           For more information on TFP, visit http://www.primerevenue.com/sainsburysTFP (user ID:
           supplier; password: trysomethingnewtoday); email support@primerevenue.com or call the
           International Freephone number 00800 7746 3000.




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     3.9   Promotional and marketing costs

           3.9.1 Contribution to marketing costs
           In general we will not require you to make any payments towards costs of gifts or hospitality
           for our colleagues – see also section 5.8.

           In certain circumstances, we may ask you to pay for the following:
           l the costs of technical colleagues visiting you for the purposes of testing or evaluating your

           products to ensure that they comply with our specifications. Further details are contained in
           the document Conducting Business with Sainsbury’s
           l if you supply our own-brand products, for consistency and sustainability, the costs of

           packaging design. Further details are contained in the document Conducting Business
           with Sainsbury’s
           l on the occasion that we agree consumer / market research is needed.



            We will occasionally require payments from you for visits to your premises,
            packaging and artwork and consumer / market research. Details of these payments
            can be found in the Conducting Business with Sainsbury’s document on Touchpoint.

           3.9.2 Collection via deduction from your account
           When you agree to fund trading promotions and marketing activity, we will deduct these
           costs from future payments that we make to you. An invoice will be sent to you via post,
           detailing the amounts that will be deducted from your next remittance.

           We deduct promotional monies from your account immediately after producing the VAT
           invoice. We post invoices for fixed and complex promotional deals daily and for retrospective
           promotional funding weekly.

           If a business development incentive is in place for your products, it will be invoiced by your
           Buyer at least once every six months.

           3.9.3 Collection via invoice
           If there are not sufficient funds on your account to cover costs that are due, we will request
           payment by invoice. Under these circumstances, invoices for promotional funds must be
           settled within 7 working days.

 3.10      Electronic statements
           As part of our yearly audit reviews, we may ask you to send us electronic statements in
           order to complete our internal audits. You must provide such statements to help us to
           maintain accurate records.




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4    4     Systems information                                                                  CONFIDENTIAL



                                                                         SUPPLY CHAIN
                                                                         SID/Touchpoint
                                                                           Emptorius


                          TRADING
                                                  These teams will support you at the
                         CARES
                                                    Holborn Store Support Centre:
                       E-sourcing
                        INSPIRE
                    New Supplier Setup
                                                                          SYSTEMS
                                                                             EDI
                                                                          Touchpoint



     4.1   General systems information
           4.1.1 Our supplier websites
           Access to all suppliers’ applications and tools for the job is available currently
           through the Sainsbury’s Information Direct website (SID) and, in parallel, via
           its new replacement site, ‘Touchpoint’.

           The SID site will be decommissioned once all suppliers have been provided with
           access to the new b2b portal ‘Touchpoint’.
           http://www2.sainsburys.co.uk/sid
           https://touchpoint.sainsburys.co.uk

           4.1.2 Supplier systems prerequisites
           You need a 13-digit Global Location Number (GLN) to send electronic messages
           to us.
           You will need to be connected to an approved network if you choose to use EDI
           via a Value Added Network (VAN).
           For more details, please visit either:
           http://www2.sainsburys.co.uk/SID/info_edi.htm or
           https://touchpoint.sainsburys.co.uk – the Library section



            You must:
            – be EDI enabled to act as a supplier for us
            – use EDI for the exchange of all purchase orders, delivery information,
            cost files and invoices with us.

            Paper documents will not be accepted as alternatives.



     4.2   Data exchange and EDI
           4.2.1 EDI summary
           We use Electronic Data Interchange (EDI) for the exchange of all transactional
           data with you. EDI is defined as the transfer of structured data, by agreed
           message standards, from one machine to another, without the need for
           human intervention.




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         We use EDI to:
         l create and transmit purchase orders

         l receive and propagate delivery information, such as advanced shipment

         notices and receipt confirmation
         l receive cost-price files

         l receive and validate invoices.



         4.2.2 Transmission method
         There are several different methods to transmit data using EDI – one is to
         communicate through a Value Added Network (VAN) and it is also possible to
         adopt an internet EDI option.

         l VANs

         A VAN acts as a postal service – transactions are received, the ‘from’ and the ‘to’
         information is validated and then the data is routed to the recipient. We use
         several different networks and exploit both the Tradacoms standard and
         EANCOM standard messaging between us and suppliers.

         l EDI via the internet (Web EDI)
         We also offer web EDI, which provides a simple, user-friendly web-based interface
         with which you can receive and send EDI documents.




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     4   Systems information continued                                                                                                                CONFIDENTIAL


         4.2.3 Message types
         We send or receive the following EDI messages.

          File type      EDI message,     Comment                                                                                               Outbound      Inbound to
                         format and                                                                                                             from          Sainsbury’s
                         version                                                                                                                Sainsbury’s
          Perishable     ORDHDR           The first batch of perishable orders is transmitted by us at approximately 06.00 and the second
          order          TRADACOMS
                         VERSION 9
                                          at 09.50.                                                                                                ✓
          Perishable     ORDHDR           If you supply perishable product, contingency files will be sent to you in case the original order
          contingency
          order
                         TRADACOMS
                         VERSION 9
                                          transmission has failed. These are sent at approximately 12.40 each day.
                                                                                                                                                   ✓
          Perishable     PPRDR            These files are optional. You can request these to be transmitted on specific nights, and they
          forecast       TRADACOMS        include purchase orders for week 2 and week 3.
                         VERSION 2                                                                                                                 ✓
          Non-           ORDHDR           Non-perishable orders are transmitted to RDCs at approximately 10.50 each day. These can be
          perishable
          order
                         TRADACOMS
                         VERSION 9
                                          sent to you, your supply group, or both.                                                                 ✓
          Non-           PPRDR            These files are sent each Tuesday night only. They contain expected orders for weeks 2 and 3,
          perishable
          forecast
                         TRADACOMS
                         VERSION 2
                                          and are optional.                                                                                        ✓
          Perishable     DELFOR           Perishable bookings are transmitted daily at approximately 13.30 to you and your haulier if you
          bookings       -EANCOM
                         VERSION D96A
                                          deliver direct to depot. The file contains booking references, delivery times and vehicle IDs for
                                          the following day’s deliveries.
                                                                                                                                                   ✓
          Shipping       ORDHDR           Shipping orders are for delivery into a second-tier location, such as a bonded warehouse.
          order          TRADACOMS
                         VERSION 9
                                          Shipping orders are similar to non-perishable and are transmitted each evening at
                                          approximately 20.30. They include a delivery day but not a time.
                                                                                                                                                   ✓
          Confirmation   DLCHDR           Confirmation of receipt notifies you of a received delivery at depot.
          of receipt
          (COR)
                         TRADACOMS
                         VERSION 4
                                                                                                                                                   ✓
          Advanced       DESADV           An ASN is an electronic delivery note. These must be received from you and your trading
          shipment       EANCOM           partners before the corresponding vehicles arrive at one of our automated depots or perishable                       ✓
          notice (ASN)   VERSION D96A     hubs. See section 6.5.4 for more information.
          Invoice        INVFIL           EDI invoices should be transmitted once the delivery quantities have been confirmed. They must
                         TRADACOMS        be transmitted in a timely manner to ensure prompt processing and the correct payment terms                          ✓
                         VERSION 8 or 9   apply.
          Cost price     PRIHDR           EDI cost-price files should be transmitted twice a week and contain cost prices for all the live
          (CFE)          TRADACOMS        products supplied to us for the following Sunday to Saturday. Price files must be sent firstly on
                         VERSION 8 or     Monday once all price negotiations have been completed, with a second send on Thursday to
                         PRICAT           ensure any errors or mismatches in the first file are corrected before the end of the week.
                         EANCOM D96A      Should there be any EDI errors, you will receive an email outlining these. You will also receive an                  ✓
                                          automated email with details of lines that have been rejected due to data errors, as well as which
                                          lines have mismatched on price. You must ensure that you contact the relevant Buyer to review
                                          and resolve these errors. Once we have agreed costs you must amend the errors and re-submit
                                          the CFE file before the end of the week.
                                          You must transmit your cost prices using CFE EDI.




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 4.3     Data synchronisation
         The Global Data Synchronisation Network (GDSN) was created as an
         industry-endorsed initiative to overcome product data inaccuracies and
         increase efficiencies among trading partners and their supply chains. The
         standards body that governs the GDSN is GS1.

         We will engage in this network by capturing the product details entered into
         these data pools, starting with a subset of our categories with a selection of
         branded suppliers. We will extract the new and changed lines and manually
         integrate them into our merchandising systems to improve our data accuracy.
         (Poor data accuracy has historically caused issues with our depot receipts, KPI
         measurements and replenishment, hence the drive to improve our data quality.)

         We aim to use the GDSN and GS1 standards for all product creation and
         amendment by either taking the data from these data pools directly with full
         integration into our core systems, or allowing suppliers who have not engaged
         with the GDSN to key in their products into easy-to-use web forms (in
         accordance with the GS1 standards). More detail will be added to Touchpoint.



 4.4     Emptorius
         Emptorius is the primary distribution finance application for data entry and
         self-billing. The aim of Emptorius is to let you know what is happening at all
         times. The Emptorius user guide provides information on the system.

         4.4.1 Who uses Emptorius?
         You will find Emptorius useful if you:
         l use the perishable network (chill and produce) using primary consolidation

         and transport
         l use the ambient and frozen networks using primary consolidation

         centres (PCCs)
         l use our backhaul secondary transport

         l use crates and our managed assets.



         4.4.2 Emptorius lets you:
         l access your supplier agreement and warehousing and transport rates

         l access your delivery-quantities information for the current and past

         weeks, for each depot and each day
         l access your weekly invoices and weekly invoice advices showing the

         breakdown of the delivery quantities for the week
         l access current and past diesel prices

         l confirm or disagree with the delivery quantities entered by hauliers

         for the previous week.

         4.4.3 The Emptorius agreements
         Emptorius provides different types of agreements according to the
         transport solution that we are recommending to you, including:
         l supplier agreements

         l haulier/PCC agreements

         l foreign direct agreements.




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     4     Systems information continued                                                       CONFIDENTIAL

           4.4.4 The Emptorius timescales and dispute process

            Week              Day                 Activity
            One               Sunday to           Products being collected and distributed
                              Saturday            by haulier
            Two               Sunday to           Haulier enters in Emptorius the delivery
                              Tuesday             quantities booked by you for collection
                                                  and distribution in week one
            Two               Wednesday to        You confirm or disagree the delivery
                              Thursday            quantities for week one in Emptorius
            Two               Friday              Emptorius week is closed and all delivery
                                                  quantities for week one are automatically
                                                  confirmed and invoiced unless delivery
                                                  quantities are disagreed
            Three             Monday to           Invoices available on Emptorius, minus
                              Tuesday             disputed volumes
            Three             Tuesday to Friday   Disputes addressed by all parties (when
                                                  relevant)




            You must record all disputes within the given timescales, as investigation
            after the account has been closed cannot be carried out.




            You should be aware that if a dispute is logged in Emptorius, the charge
            for the total delivery quantity entered by the haulier for that day and
            that depot will be frozen until we release the dispute.



           To ask for an Emptorius user guide and login, please email pdf@sainsbury.co.uk



     4.5   Complaints Analysis and Response System (CARES)

           4.5.1 What is CARES?
           We use CARES to capture product-related customer complaint and refund
           information. We will place you on the CARES system when we appoint you as
           our supplier, and the relevant trading department will discuss the principles at
           the outset of the relationship before the contract is signed.

           4.5.2 Why is CARES important to you?
           We have a comprehensive product complaint capture system that is unique
           amongst major UK supermarkets in that every complaint returned is
           individually recorded and the details passed to the relevant supplier. This level
           of data capture benefits you by giving you a more accurate performance
           indicator than provided by many other supermarkets and providing you with a
           valuable product evaluation tool.

           You receive regular weekly information to help you monitor the performance
           and quality of the products you supply to us and to ensure that these meet our
           criteria. The CARES system also allows us, with minimal delay, to identify any
           potentially adverse trends and, in the event of an alert, immediately notify you
           of any issues.




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     4     Systems information continued                                                        CONFIDENTIAL


           4.5.3 Why is CARES important to us?
           Product complaint information is critical in ensuring that we meet our absolute
           commitment to the highest standards of product quality to our customers.
           Details gathered on a daily basis are used by our Traders and Product
           Technologists to track product performance, perform trend analysis and to
           quickly pinpoint potentially serious product problems through the operation of
           an early warning system.



           4.5.4 Complaints charging
           You must account to us for any costs we reasonably incur in resolving customer
           complaints in circumstances where the complaint is justifiable and attributable
           to negligence or default or breach of these Trading Terms on your part. This is
           based on the average expected costs to us in resolving such complaints and is
           standardised to ensure fairness and transparency.

           A full account of the charge structure is available in Guiding You. CARES and
           Supplier Charging Suppliers Guide (TG004 version 3) which can be found on
           INSPIRE or for accessing data on: http://www2.sainsburys.co.uk/SID/
           CaresReporting.htm or https://touchpoint.sainsburys.co.uk – the Library
           section > Sainsbury’s Business Practices > Trading

            You must account to us for any costs we incur in resolving customer
            complaints in circumstances where the complaint is justifiable and
            attributable to negligence or default or breach of these Trading Terms
            on your part. We will levy a standard charge which is based on the
            average expected costs to us in resolving such complaints.



     4.6   Performance measuring tools

           There are several different performance measurement tools available to you
           which provide a range of KPI reports and data-mining tools.

           4.6.1 Our Performance Data Site (PDS) (accessible via SID and Touchpoint)
           PDS is our Performance Data Site. It enables you to view daily commodity data
           across a wide range of measures including sales, stocks and customer
           availability. The purpose of the site is to provide you with visibility of the key
           measures that our supply chain controllers refer to on a daily basis to help
           manage the flow of products.

           The system provides a 12-week history so trends can be picked up and monitored.

           4.6.2 Horizon (accessible via SID and Touchpoint)
           This suite provides two applications for you:
           l Product Performance Management (PPM) supports the analysis of

             poor-performing products via a range of metrics including SKU/store data
           l Alerting and Resolution Management (ARM) is an exception-based reporting

             tool that automatically alerts you and us by email when products breach
             pre-defined thresholds. For more information, see https://sainsbury.eqos.com




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     4     Systems information continued                                                           CONFIDENTIAL


           4.6.3 My Data Dash (accessible via Touchpoint only)
           My Data Dash provides consistent data on key trading and supply chain metrics
           through a suite of simple, easy-to-select, downloadable and printable reports.
           The Buyers, supply chain colleagues and you can see the same data at the same
           time, helping to improve the way we work together to enhance performance.

     4.7   E-sourcing
           E-sourcing is a simple online negotiation process that is a fair and open way to
           help support supply decisions. Traders have the option of using e-sourcing to
           negotiate the cost of products and services.

           The purpose of an e-sourcing event is to give you (if invited by us) the opportunity
           to offer as competitive a price as possible for the business available. Although
           most e-sourcing events are carried out on the understanding that the lowest bid
           will get the business, our guiding principles in relation to supply continue to be
           quality, service and general supply capabilities, in addition to price. The specific
           conditions that apply to the event will be set out in the invitation, and we will let
           you know the outcome of the tender, and any future decisions about the supply,
           once all guiding principles have been met.

 4.8       INSPIRE
           If you supply us with own-brand product, INSPIRE has been developed for
           management and incident reporting to encourage your compliance to all our
           current and future product development needs, ranging from simple recipe
           generation to full adherence to our brand standards. For more information,
           see https://www.inspire-js.com




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     5.1   Code of conduct for working in a socially responsible way
           (code of conduct)
           The code of conduct includes a declaration that we will do business fairly,
           without putting unnecessary pressure on suppliers. It also describes the
           monitoring process that we will use to make sure the code of conduct is being
           followed.

           The Standards which apply to all of our suppliers
           The code of conduct sets out the standards and the social values we share with
           our partner companies, and provides a basis for our trading relationships. Our
           expectation is that you and your suppliers of goods and services operate in line
           with the principles of the code of conduct.

           The Standards which apply to all of our factories – the Ethical Trading
           Initiative Base Code (ETI Base Code)
           ETI Base Code and the accompanying Principles of Implementation, both
           of which were negotiated and agreed by the founding trade union, NGO and
           corporate members of ETI, form the basis of the standards applied to all
           our factories. The ETI Base Code contains nine clauses that reflect the
           most relevant international standards with respect to labour practices
           (ILO Conventions). The Principles of Implementation set out general
           principles governing the implementation of the ETI Base Code.

           Under the code of conduct, all our suppliers must comply with the ETI Base
           Code. The ETI Base Code requires:

           5.1.1 Employment is freely chosen
           l Workers are not required to lodge “deposits” or their identity papers

             with their employer and are free to leave their employer after reasonable
             notice.
           l There is no forced, bonded or involuntary prison labour.



           5.1.2 Freedom of association and the right to collective bargaining are
           respected
           l Workers, without distinction, have the right to join or form trade unions of

             their own choosing and to bargain collectively.
           l The employer adopts an open attitude towards the activities of trade unions

             and their organisational activities.
           l Workers’ representatives are not discriminated against and have

             access to carry out their representative functions in the workplace.
           l Where the right to freedom of association and collective bargaining

             is restricted under law, the employer facilitates, and does not hinder,
             the development of parallel means for independent and free association and
             bargaining.




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     5   Trading with you continued                                                           CONFIDENTIAL


         5.1.3 Working conditions are safe and hygienic
         l A safe and hygienic working environment shall be provided, bearing in

           mind the prevailing knowledge of the industry and of any specific hazards.
           Adequate steps shall be taken to prevent accidents and injury to health
           arising out of, associated with or occurring in the course of work, by
           minimising, so far as is reasonably practicable, the causes of hazards
           inherent in the working environment.
         l Workers shall receive regular and recorded health and safety training,

           and such training shall be repeated for new or reassigned workers.
         l Access to clean toilet facilities and to potable water, and, if appropriate,

           sanitary facilities for food storage shall be provided.
         l Accommodation, where provided, shall be clean and safe, and meet the basic

           needs of the workers.
         l The company observing the code shall assign responsibility for health and

           safety to a senior management representative.

         5.1.4 Child labour shall not be used
         l There shall be no new recruitment of child labour.

         l Companies shall develop or participate in and contribute to policies and

           programmes which provide for the transition of any child found to be
           performing child labour to enable her or him to attend and remain in
           quality education until no longer a child; “child” and “child labour” being
           defined in the appendices.
         l Children and young persons under 18 shall not be employed at night or in

           hazardous conditions.
         l These policies and procedures shall conform to the provisions of the relevant

           ILO standards.

         5.1.5 Living wages are paid
         l Wages and benefits paid for a standard working week meet, at a minimum,

           national legal standards or industry benchmark standards, whichever is
           higher. In any event, wages should always be enough to meet basic needs and
           to provide some discretionary income.
         l All workers shall be provided with written and understandable information

           about their employment conditions in respect to wages before they enter
           employment, and about the particulars of their wages for the pay period
           concerned each time that they are paid.
         l Deductions from wages as a disciplinary measure shall not be permitted, nor

           shall any deductions from wages not provided for by national law be permitted
           without the expressed permission of the worker concerned. All disciplinary
           measures should be recorded.

         5.1.6 Working hours are not excessive
         l Working hours comply with national laws and benchmark industry standards,

          whichever affords greater protection.
         l In any event, workers shall not on a regular basis be required to work in excess

           of 48 hours per week and shall be provided with at least one day off for every
           seven-day period on average. Overtime shall be voluntary, shall not exceed
           12 hours per week, shall not be demanded on a regular basis and shall always
           be compensated at a premium rate.




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     5     Trading with you continued                                                          CONFIDENTIAL


           5.1.7 No discrimination is practised
           l There is no discrimination in hiring, compensation, access to training,

            promotion, termination or retirement based on race, caste, national origin,
            religion, age, disability, gender, marital status, sexual orientation, union
            membership or political affiliation.

           5.1.8 Regular employment is provided
           l To every extent possible, work performed must be on the basis of recognised
            employment relationship established through national law and practice.
           l Obligations to employees under labour or social security laws and regulations

            arising from the regular employment relationship shall not be avoided through
            the use of labour-only contracting, sub-contracting or home-working
            arrangements, or through apprenticeship schemes where there is no real intent
            to impart skills or provide regular employment, nor shall any such obligations
            be avoided through the excessive use of fixed-term contracts of employment.

           5.1.9 No harsh or inhumane treatment is allowed
           l Physicalabuse or discipline, the threat of physical abuse, sexual or other
            harassment and verbal abuse or other forms of intimidation shall be prohibited.

           The provisions of this code constitute minimum and not maximum standards,
           and this code should not be used to prevent companies from exceeding these
           standards. Companies applying this standard are expected to comply with
           national and other applicable law and, where the provisions of law and this ETI
           Base Code address the same subject, to apply that provision which affords the
           greater protection.

           For more details about our main principles, please log onto the code of conduct
           guide at http://www.ethicaltrade.org and our Corporate Responsibility Pages
           (including our CR report) at http://www.jsainsburys.co.uk/cr



     5.2   Applying and monitoring these principles
           We will apply the principles when doing business with you. You must put a
           formal system in place to ensure the code of conduct is available to all of your
           employees and that they have a confidential way of reporting anyone who
           breaks the code of conduct.

           Programmes for monitoring performance are in place and will continue to be
           part of the normal monitoring and inspection process followed by our colleagues
           and their representatives. Colleagues and representatives must have full access
           to records and premises during visits.

           Assessments of your premises and those within the supply chain will also play
           an important role in the overall assessment process.

           We will use third-party assessments if we or the supplier think it is appropriate
           to do so.




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           We will deal with any problems in performance as part of the normal control
           arrangements. If we believe that our code of conduct is not being followed,
           we will expect you to work with our colleagues or representatives (or both)
           to achieve an agreed standard, within appropriate timescales.

           We will not continue doing business with companies that are not willing to work
           towards such improvements.

           If you employ agents or subcontractors, you will take responsibility for these
           aspects of performance.



            If you supply our own-brand products, you must join Sedex and use the
            system to show your performance against this code of conduct. For more
            information on how to join, log onto http://www.sedex.org.uk



     5.3   Environment
           Our environmental policy aims to maintain the highest standards of
           environmental management in all areas of our business, to reduce any negative
           effects on the environment, and to improve on these standards at all times.

           The main aims of our packaging policy are to use enough to be fit for its
           intended purpose, reduce the amounts being thrown away, and save scarce
           resources by making sure that packaging can be reused or recycled where
           possible. We encourage you to examine your packaging systems to see if they
           meet these aims.

           Our packaging brand standards can be downloaded from the document library
           on INSPIRE: https://www.inspire-js.com

     5.4   Business continuity
           You should have formal business continuity arrangements in place to ensure
           supply disruptions are minimised, particularly in the event of a major incident
           that might affect the availability of:
           l key processing, storage or distribution facilities

           l critical service providers

           l critical IT systems

           l critical personnel.



            If the Buyer requests details of your business continuity capability,
            you should provide them via our standard business continuity form
            (see link below).

           http://www2.sainsburys.co.uk/SID/Documents/BusinessContinuityQuestvs6.doc
           or https://touchpoint.sainsburys.co.uk – the Library section > Sainsbury’s
           Business Practices > Supply Chain – Trading with Sainsbury’s

            If there are any concerns with your business continuity arrangements,
            we will agree a way forward with you in order to ensure a suitable
            continuity capability is in place.




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     5.5   Our technical requirements for you

           5.5.1 Food-safety management system

            You must have a safety management system that complies with our
            requirements.

           Your food-safety management system must cover the following elements:
           l senior management commitment and continual improvement

           l food-safety plan (HACCP)

           l food-safety and quality-management system including:

                l supplier approval process

                l ongoing supplier assessment

                l supplier visits

                      l incidents and withdrawals

                      l complaints management

                      l the disposal of out-of-specification material and our own-brand

                       product in packaging
           l site standards

           l product control, including:

                l new product development

                l packaging design and approval process

           l process control

           l personnel.



            In addition, if you produce or package our own-brand products, you must
            achieve certification against a third-party standard recognised by us.

           The standards recognised by us are currently:
           l The British Retail Consortium (BRC) Global Standard For Food Safety

           l The BRC Global Standard For Consumer Products (exceptions to this must be

            agreed in writing by our relevant Head of Product Technology)
           l British Ornamental Plant Producers Scheme (BOPP)

           l Medicines and Healthcare Products Regulatory Agency (MHRA).



           It is your responsibility to fund, engage and maintain your third-party audit
           requirements against a recognised standard (see Conducting Business with
           Sainsbury’s document).

           5.5.2 Specifications
           All of our own-brand products must be produced in accordance with a detailed,
           approved legal document called the product specification.

            You must comply in full with all specifications.




28
     5   Trading with you continued                                                          CONFIDENTIAL


          Product specifications contain confidential information belonging to us.
          You must keep them confidential and must not reproduce or share with
          a third-party (except where necessary for us to respond to enforcement
          challenges from authorities, or to queries raised by our customers), or
          change them without prior written agreement between our Product
          Technologist and your technical manager or equivalent. We also draw
          your attention to section 5.0 of Appendix 14 which sets out the legal
          consequences of disclosing any “work” made for or commissioned by us
          in which our copyright, design rights or other intellectual property rights
          vest. Product packed to this specification is also subject to all requirements
          contained within our Technical Manual and Product Law Guide; in addition,
          this product must comply with all relevant UK and EC legislation.

         5.5.3 Product safety approval
         You are responsible for the safety of products you supply to us. Our product
         safety team assesses all of our own-brand products (with the exception of some
         produce lines) prior to launch to ensure key safety controls are in place using
         either the Hazard Analysis Risk Assessment (HARA) or Technologist Safety
         Approval (TSA) process.

         Certain branded products may also require safety approval by our product
         safety team where the risks are considered to be high, e.g. raw milk soft cheese,
         certain baby foods, short maturation salamis/dried meat. Such products must
         not be launched without product safety approval.

          For certain branded products, you must not change the product
          specification without prior written agreement between our Product
          Technologist and your technical manager or equivalent.

         5.5.4 Policies
         Our policies that are relevant to you will be determined by the specific products
         supplied and activities undertaken. All of our technical policies incorporate
         mandatory requirements and you must demonstrate full compliance against
         all policies via an audit schedule agreed with your Product Technologist.

          You must read in full and accept all relevant policies and brand standards,
          and confirm you have read them in full and, by clicking “accept” on
          INSPIRE, you agree to comply with them.

         5.5.5 Further technical requirements
         If you supply own-brand products, additional information on all of the above
         and further compulsory requirements are found in our Supplier Technical
         Manual (HP002), which can be located in the document library on INSPIRE
         (https://www.inspire-js.com).

          If you supply our own-brand products, you must keep evidence to show
          that you meet the compulsory requirements contained in our Suppliers
          Technical Manual (HP002).




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     5     Trading with you continued                                                        CONFIDENTIAL


     5.6   Product packaging controls
           Sections 5.6.1–5.6.3 apply to all primary, secondary and tertiary packaging.

           5.6.1 Product packaging
           All packaging must:
           l be fit for purpose

           l be tamper evident

           l be compliant with Packaging (Essential Requirements) Regulations 1998

           l be transit- and store-tested, where appropriate

           l be approved by our Product Technologist.



           You must have robust controls in the packaging store and the production area,
           which must be documented and reviewed to ensure that product is correctly
           packed and coded as agreed with our Product Technologist.

             IMPORTANT: Where any product or packaging with our name or recognisable
             branding is over-produced or out of specification, you must either dispose of
             it or rework it so that it cannot be reused or sold as our product.

           5.6.2 Packaging approval
           You must check that all printed and unprinted packaging complies with
           specification (including colour):
           l at initial production

           l for all ongoing deliveries (in accordance with your internal processes).



           5.6.3 Packaging design process
           You must be aware of the following:
           l you will account to us, in a timely manner, for all costs associated with the

            packaging design process that are charged directly to us (please refer to
            TG026 The Technical Guideline for Own Brand Packaging (on INSPIRE) for
            costs associated with the packaging design process)
           l you will provide us with any information we request in relation to the

            packaging design process, without undue delay, or we may charge you for any
            costs to us resulting from such delays, in accordance with TG026 The Technical
            Guideline for Own Brand Packaging (on INSPIRE).

            You must ensure that all of your packaging meets the criteria as detailed
            above and that you comply with your obligations above.

     5.7   Conducting business with us
           We may impose charges for the costs or financial impact incurred as a result of
           doing business with you; for example, costs of own-brand label and packaging
           design or financial impact of rejecting goods that do not comply with our
           specification.

           In order to improve certainty and transparency on when and how such charges
           may be imposed, please refer to Conducting Business with Sainsbury’s located
           on Touchpoint (http://touchpoint.sainsburys.co.uk) or contact your Buyer.

             IMPORTANT: You agree to pay us the charges we may impose in
             accordance with Conducting Business with Sainsbury’s (or other part
             of our supply agreement).


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     5     Trading with you continued                                                                         CONFIDENTIAL


     5.8   Hospitality and gifts from suppliers

           5.8.1 Aim
           All of our colleagues are expected to maintain very high ethical standards of professional and
           personal behaviour.

           Our policy on unethical behaviour includes giving or accepting gifts, hospitality, services or
           other benefits to or from customers, suppliers or other independent agencies, to gain an
           unfair advantage.

           This policy is for all our colleagues, no matter what their grade or division.

           5.8.2 Supplier relations, gifts and hospitality
           We acknowledge that good relationships with you and other organisations are vital to our
           success and recognise that there will be occasions when you offer our colleagues a gift,
           hospitality, service or other benefit. Accepting such an offer may result in our colleagues
           being placed in the position where they are perceived to be under obligation to show
           preference towards your organisation.

           Gifts will not be accepted on a personal basis and any gifts received must be donated to the
           charity raffle. Where an item is not appropriate for the charity raffle, e.g. a perishable item,
           our colleagues will keep the gift subject to gaining consent from their Departmental Director
           or Operating Board Director. There may also be tax implications for the colleague where the
           annual value of gifts received is in excess of £250.

           We will not expect you to pay towards the costs of our colleagues’ visits (this would include
           travel and accommodation costs).

           Usually, hospitality will not be accepted by our colleagues unless it is specifically offered
           where there is a business need for attending an event. Hospitality must always be within
           modest limits and authorised in advance by our colleague’s Departmental Director or
           Operating Board Director. There may be occasions where hospitality can be accepted where
           there is no business need; however, this should be authorised in advance by our colleague’s
           Departmental Director or Operating Board Director, and where appropriate our colleagues
           accepting the hospitality should take holiday from work to attend.

            You must not give or offer gifts or hospitality to our colleagues other
            than in accordance with the above policy.

           5.8.3 Conflicts of interest and relationships at work
           We recognise that our colleagues may already have, or may form, personal friendships with
           people they work with and in some cases close personal relationships. We do not wish to
           interfere in such relationships, although it is important to stress that appropriate and
           professional behaviour must be maintained at all times. Personal relationships between
           our colleagues and our suppliers may cause conflicts of interest in some cases. Where
           there could be a possible conflict or a perceived conflict, our colleague must inform their
           line manager of the relationship immediately.

            Where personal relationships form between one of our colleagues and
            your employees that may cause conflicts of interest, immediate action
            must be taken, as detailed above.




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     5     Trading with you continued                                                                     CONFIDENTIAL


           5.8.4 Inducement
           Our colleagues must never offer or pay any person for anything including offer donations,
           community investment or political contributions to gain an unfair advantage, either
           personal or business, or to discourage others from carrying out their job.

           If you become aware that any of our colleagues are not keeping to this policy, please report
           any concerns to our confidential reporting service, called RightLine.

           The website address is: http://www.riskavert.co.uk/rightline or telephone: 0800 085 2099

            You must not accept any donation, gift or inducement from any of our colleagues
            if this breaches our policy above, and you must report any breaches in
            accordance with the above policy.



     5.9   Additional documentation
           From time to time we will use documentation, electronic or paper based, to communicate/
           exchange, verify and agree important information with you. For simplicity and consistency,
           many of these documents are standardised in the form of a template to aid completion,
           although some may also be bespoke dependent upon requirement. However, whether
           template or bespoke, all documents produced or used by us either currently or in the
           future should be considered as being incorporated into your supply agreement with us.

           Whether template or bespoke, you must complete all documents accurately and efficiently.

           The documents
           Detailed below is a list of the template documents as they exist at November 2009, along
           with a brief description of when and why they might be used. A copy of each may be
           obtained from your Buyer.




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     5     Trading with you continued                                                                                          CONFIDENTIAL


     5.9   Document name    Document description and use                                                         Document format
           SKU Agreement    This form should be fully completed, predominantly by you on Touchpoint or           Electronic or manual.
                            manually, then checked and authorised by the Buyer prior to entry into our           • (Note – The manual version of
                            RMS system.                                                                          this document is planned to be
                                                                                                                 phased out in 2010 and replaced
                            This form should be used for:                                                        by an e-form that can be
                            • new SKU set-up by Touchpoint or manually                                           accessed via Touchpoint)
                            • change of pack size
                            • adding additional suppliers to a SKU
                            • changing of details on an existing product, i.e. packaging
           Promotional      This form should be fully completed, predominantly by you on Touchpoint or           Electronic or manual.
           Agreement        manually, then checked and authorised by the Buyer prior to entry into our           • (Note – The manual version of
                            RMS system.                                                                          this document is planned to be
                                                                                                                 phased out in 2010 and replaced
                            This form should be used for:                                                        by an e-form that can be
                            • all promotional final agreements between you and us                                accessed via Touchpoint)
                            You are to complete all promotional information including advertising and funding
                            connected to this promotion only
                            You are to complete and forward the Promotional Agreement at least 10 weeks
                            prior to the promotional instore date unless otherwise confirmed

           BDI/Deferred     This form should be completed, predominantly by you on Touchpoint or manually.       Electronic or manual.
           Bonus            It must then be checked and authorised by the Buyer, prior to entry into our         • (Note – The manual version of
                            RMS system.                                                                          this document is planned to be
                                                                                                                 phased out in 2010 and replaced
                            This form should be used for:                                                        by an e-form that can be
                            • all New Business Development Incentives (BDI) & Deferred Bonus agreed              accessed via Touchpoint)
                            between you and us
                            • any amendments to these incentives

           Fixed Deals      This form should be fully completed, predominantly by you on Touchpoint or           Electronic or manual.
                            manually. Then it is to be checked and authorised by the Buyer prior to entry into   • (Note – The manual version of
                            our RMS system.                                                                      this document is planned to be
                                                                                                                 phased out in 2010 and replaced
                            This form should be used for:                                                        by an e-form that can be
                            • All Fixed Deals agreed between you and us that are non-promotional                 accessed via Touchpoint)
                            Fixed Deals are lump sum payments, e.g. leaflets/marketing support/press
                            advertising
           Derogation       This form should be fully completed, predominantly by you on Touchpoint or           Electronic or manual.
           Request          manually, then checked and authorised by the Buyer prior to entry into our           • (Note – The manual version of
                            RMS system.                                                                          this document is planned to be
                                                                                                                 phased out in 2010 and replaced
                            This form should be used if:                                                         by an e-form that can be
                            • you are requesting a reduction in the life of a product into our depot             accessed via Touchpoint)


           Cost Agreement   This form should be fully completed, predominantly by you on Touchpoint or           Electronic or manual.
                            manually, then checked and authorised by the Buyer prior to entry into our           • (Note – The manual version of
                            RMS system.                                                                          this document is planned to be
                                                                                                                 phased out in 2010 and replaced
                            This form should be used for:                                                        by an e-form that can be
                            • all costs agreed between you and us that are non-promotional or new lines          accessed via Touchpoint)


           Business Plans   This form is completed at the request of and in conjunction with the Buyer.          Speak to your Buyer

                            This form may be considered as:
                            • a framework between you and us on developing the business. Key objectives
                            include but are not limited to sales, cost of goods, promotions and NPD
                            • a living document that can be expected to change through the year
                            • not a guarantee of business




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6    5     Delivering products                                                                            CONFIDENTIAL


     6.0   We aim to provide high-quality product, and our delivery procedures and processes will allow
           depots to receive products more accurately, improving availability and payment processes.

           We run a primary network, which we recommend you use to deliver product into the depot
           network. The network consolidates and manages the inbound delivery of products on
           behalf of suppliers to the depot network. There are three main areas:
           l UK ambient and frozen (see section 6.5.9 for further details)

           l international

           l perishables (see section 6.5.10 for further details).



           Unless we agree otherwise in writing, we do not own a product within the primary network
           until the goods are received in a depot.

           For more information on using the primary network or if you have any queries
           with this, please contact the primary distribution team. The contacts are at
           http://www2.sainsburys.co.uk/sid/info.htm Please click on ‘primary distribution’.

            For products delivered to us, you must meet the standards outlined below.



     6.1   Forecasting
           Forecasts are important to both of us and are particularly beneficial in helping you to plan
           production to meet our expected needs. We will endeavour to prepare forecasts in good
           faith and with due care, and we share the basis of our forecasting process with you below.

           Our forecasts will most often be based upon certain principal factors, albeit to varying
           degrees, such as historical product sales and features specific to the product such as,
           non-exhaustively, geography, seasonality/time of year and weather.

           Should you require further explanation of the factors that comprise a specific forecast or
           the potential weighting of each factor, we will be happy to provide it. Simply contact your
           Sainsbury’s Supply Chain colleague.

           Indeed, should you have concerns in relation to a specific forecast, it is vital that you
           contact us before it becomes effective as an order so that a further review can be
           undertaken, if required.

           Forecasting of promotions and seasonal events will be shared with you in a timely fashion
           in order to build a joint forecast wherever possible.



             IMPORTANT: Any forecast that we provide you may be subject to revision and cannot
             be binding. We will not be liable to you for compensation for any forecasting errors.



     6.2   Ordering
           6.2.1 No retrospective amendments to our supply agreement

             IMPORTANT: We agree not to vary our supply agreement with you retrospectively
             and shall not request or require that you consent to any such retrospective variation.




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     6     Delivering products continued                                                                       CONFIDENTIAL


           6.2.2 Ordering on a conditional basis
           We may from time to time order products from you on a conditional basis where it
           is difficult for us to predict likely demand for the products in question, for example:
           (i) orders for new product lines; (ii) products with a short shelf life being seasonal in nature;
           (iii) “fresh” products with a short shelf life. There may be additional factors outside your
           and our control, such as adverse weather.

           We will agree the conditional basis for any such arrangement with you in advance of the order.

           6.2.3 Circumstances in which orders may be amended or cancelled

           As set out in section 6.2.2, certain circumstances often make it difficult to predict the
           demand for an order as demand may be heavily influenced from time to time by
           circumstances that neither we nor you are able to control (for example, if there is a
           significant and unexpected decline in demand due to adverse weather conditions).

             IMPORTANT: Providing we give you reasonable notice in each case, you agree that we
             may cancel or amend any order in such circumstances and you agree to mitigate any
             financial impact on your business following the order’s amendment or cancellation.
             Should you have concerns following such mitigation, please contact your Buyer.

           6.2.4 Ordering for promotions

             IMPORTANT: When ordering for promotions, we agree to take all due care to ensure
             that we do not over-order goods.



     6.3   Acceptance specifications

           You must ensure that all products meet the following basic specifications:
           l safety

           l legality

           l quality

           l contractual agreement

           l TUC   quality.

           We will monitor and assess all deliveries using the following specifications:
           l product integrity

           l minimum acceptable life

           l product temperature

           l no children or pets in driver’s cab

           l TUC quality.



           You are responsible for all rejections and delivery failures that result directly from your
           actions or the actions of your hauliers. Your non-primary hauliers must remove any
           rejected product when they deliver it.

            If you do not meet our acceptance specifications, we may reject the product.
            If we reject the product when it is delivered, you must remove the product from the
            depot and take the appropriate action with the rejected product.




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     6   Delivering products continued                                                                    CONFIDENTIAL


         6.3.1 Purchase orders
         Depots check delivery quantities against purchase orders.

          • We send orders to suppliers through EDI. You must quote our purchase order
          number on all delivery documents.
          • You must meet the order in full on the delivery date shown on the purchase order.
          Any expected problems must be reported to the supply chain controller immediately.

         If you have any questions about orders made through EDI, phone 0845 603 6279.

           IMPORTANT: We may reject delivery of any product that is not on the purchase order.
           We may reject product substitutions unless they have been agreed beforehand with the
           logistics controller and the purchase order has been amended by you and accepted by us.

           IMPORTANT: We may reject any product without the correct commodity-level
           paperwork. If you are using another operator, it is your responsibility to provide the
           correct paperwork.



           If the product is rejected at the depot, you must pay the costs resulting from this.



         6.3.2 Acceptable temperatures
         We will check the temperature of all perishable products before we unload them.

         For full details, please see our chart of acceptable temperatures on our SID website at:
         http://www2.sainsburys.co.uk/sid/info_trading_with_sainsburys.htm

         The temperature checks will cover:
         l at least four separate products from each delivery
         l at least one sample from the front, back and middle of the load.



         We will measure temperature using:
         l an infrared (IR) or wire probe thermometer inserted between packs; or

         l a needle probe thermometer if the product temperature is outside the maximum or

          minimum needed.

         The haulier should be satisfied that the products they receive from you meet the standards.

         If a load or part of a load is rejected, the checker will take enough samples to represent the
         temperatures through the load. For loads made up of products from a number of suppliers,
         the checker will take enough samples to represent the products from the range of suppliers.

          If you supply perishable products to us, they must meet acceptable temperature
          levels determined by us or they may be rejected. If the product is rejected, you
          must pay the costs resulting from this.




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     6   Delivering products continued                                                                           CONFIDENTIAL


         6.3.3 Minimum acceptable life
         For products that need a date code, there must be enough life remaining on receiving the
         product at the distribution centre for it to be acceptable at stores. The specific product type
         and its total shelf life will determine the minimum acceptable life for a product.

          Product category         Minimum life on receipt (MLOR) into depot (see worked example below)
          Products manufactured    75% of total life assigned from the pack or production, rounded to the
          throughout the year      nearest whole number, or products given a total shelf life of 16 months
                                   or more must have at least 12 months’ shelf life left when they are
                                   received into the depot.
          Seasonally packed        6 months
          products, for example,   Note: This is considered the number of full days’ shelf life remaining, not
          canned rhubarb           including the date the product arrives into the depot.


         Worked example
         A product is given a shelf life of P + 8 days. If it was produced on 1 April, it would be given a
         use-by date of 9 April. 75% of 8 days = 6 days, so the last day it would be accepted into the
         depot would be 3 April.

         The MLOR for all products must be agreed with us and, in the case of own-brand products,
         will form part of the product specification. Products will be checked at the depot and we may
         reject them if delivered below the agreed minimum acceptable life or out-of-date rotation.

          You must ensure that on delivery to us, each product meets our minimum
          acceptable life for that product.

          If the product is rejected at the depot because you do not comply with our
          requirements, you must pay the resulting costs.



         6.3.4 Date codes on outer cases
         The date code must be clearly marked according to one of the examples shown below.
         No other version of date coding is acceptable.

         The dates on outer packaging must always be the same as the date coding on the
         individual packs.

         The code type to be used will depend on the total ‘life’ of each product. For our own-label
         products, the ‘life’ will be shown in the main product specification held on INSPIRE and
         agreed by the Product Technologist.

         In the examples given below, (N) is a clearance number used internally to recognise the
         number of days before the ‘Use By’ or ‘Best Before’ date by which the product must be sold.
         The requirement for a clearance indicator applies to all our own-label products, unless the
         Buyers say otherwise. Other items should also be in line with the policy wherever possible.

         Examples
         Use By 01 Jan (N)
         Best Before 01 Jan 2010 (N)
         Best Before End Dec 2010 (N)
         Expiry Date Dec 2010 (applies to Pharmacy only)
         Display Until 01 Jan




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     6   Delivering products continued                                                                    CONFIDENTIAL


         Your own quality-control procedures must confirm the clarity of date codes.

         Most short-life goods that have a ‘Use By’ or ‘Best Before’ should also have a ‘Display Until‘
         date – please refer to your product technologist for details.

         Short-life goods with a shelf life of less than 42 days must have the date encoded within the
         barcode on the outer case. Please see section 6.3.6.

         Cut flowers and some pot plants should be marked with a ‘Display Until’ date only – please
         refer to your product technologist for details.

         Buyers will tell you when these conditions apply.

         Certain non-food items will not have to be date marked. However, production codes or batch
         codes should be used so we can trace products. You should contact your Buyer(s) for advice
         on specific exceptions.

         Date codes on product packs

         Most products will carry a date code and this must be clearly marked on the pack, meeting
         the requirements detailed in the Sainsbury’s Product Law Guide, HP001.

         Date codes printed on pack should have the format as below:


                   Keep refrigerated


            Display until          Use by
              05 MAR               07 MAR



         For the design guidelines please refer to TG008a and b Labelling Guidelines found in the
         document library on INSPIRE (http://www.inspire-js.com).

         For more detailed guidance on your products, please refer to your Product Technologist.

         6.3.5 Pallet standards
         Pallet providers
         Our depots will accept the pallet providers listed below. Their pallets have been thoroughly
         tested through the inbound conveyors, pallet correction point stations and storage and
         retrieval sections at all depots.

         l Chep (blue pallets) Website: http://www.chep.com

         l IPP   Logipal (brown pallets) Website: http://www.ipplogipal.co.uk
         l LPR    (red pallets) Website: http://www.lprgrp.eu

         For more details on the pallet providers above, please contact your product controller.

         Pallets will be managed by a process known as a ‘one-way trip’. The goods must arrive on
         Chep, IPP Logipal or LPR pallets (or a pallet that meets the construction and design of a
         standard Chep UK pallet).




38
     6   Delivering products continued                                                                       CONFIDENTIAL


         Please note – if you are a PCC supplier, while the pallets are stored at the PCC, they will
         remain on your pallet account. When the pallets leave the PCC, you must transfer them to
         the pallet-provider account.

         You must follow the standards below, so that pallets can be processed successfully through
         our depot network:
         l 1.75 metre maximum height (unless otherwise approved)

         l 1 metre maximum height (slow-moving automated depots, Stoke and Rye Park)

         l 1350 kilogram maximum weight

         l Length 1200mm (1210mm to 990mm)

         l Width 1000mm (1010mm to 990mm)

         l Height 162mm (172mm to 152mm)

         l All pallets must be free of split or damaged timbers

         l If any part of a pallet is missing, the pallet will fail to meet the standards needed for it to

          be processed through the distribution network
         l No euro pallets or slaved pallets are acceptable

         l There must not be any overhang (caused by product overhang at the top and bottom,

          or by trailing shrink wrap)
         l No mixed SKU boards in ambient

         l For multi-layered pallets, shrink-wrap each individual pallet, and then shrink-wrap all

          pallets together
         l Any trailing shrink-wrap must be tied in

         l Use shrink-wrap to catch pallet corners across all depots (but no more than 2cm for

          products delivered to Stoke and Rye Park depots)
         l Shrink-wrap must be tied to middle blocks – not corner blocks

         l Only clear LDPE (Low Density Polyethylene – polythene) or LLDPE (Low Linear Density

          Polyethylene retch-wrap) must be used. Clear LDPE/LLDPE can be recycled into products
          of any colour
         l Layer interleaves will only be used where absolutely necessary. Where practical, they will

          be paper or cardboard made of at least 75% recycled material
         l No loose packaging on top of boards

         l No slip-sheets on top of boards

         l No corner reinforcement pieces over the height of the product

         l Any packaging material that is not paper or cardboard, or clear LDPE or LLDPE, will affect

          recycling. Nylon or polypropylene straps and netting must not be used, neither should too
          much adhesive tape.

          If you supply products to us on pallets, the pallets and packing must meet the
          specification detailed above or the products may be rejected. If the product is
          rejected, you must pay the costs resulting from this.



         6.3.6 Outer-case packaging
         l Packaging faults may only   be discovered during manual handling. Before goods are
          delivered into our supply chain, you must carry out product-handling trials and provide
          samples of items in their final packaging to be approved by our Buyers and technical teams.
         l Packaging must be strong enough to be handled several times within the supply chain and

          stores, and must be suitable for handling by machinery.
         l Packaging material should protect the contents and make them secure while using the

          minimum amount of material necessary.




39
     6   Delivering products continued                                                                     CONFIDENTIAL


         l Where   possible, products should be in packaging, approved by our Buyer or technical
          teams, ready to go on shelves. Detailed information for ‘shelf-ready’ packaging can be
          found in our Shelf Ready Packaging Guidelines. (The most up-to-date version of this
          manual can be downloaded from https://www.inspire-js.com.)
         l The type of corrugated board or carton board used for outer boxes or shelf-ready

          packaging must be suitable to contain the weight of the items within.
         l Outer cases must not be under-filled as this may cause contents to become crushed.

          Internal dividers must be used if necessary. Dividers may also be necessary to prevent
          glass items from accidentally breaking during handling.
         l Clear indication (labels) where the case sits within an outer break pack.

         l If an outer case or shelf-ready packaging is made from two separate pieces of packaging,

          adhesive tape should be used to make sure boxes stay intact. This is especially important
          for hoods and trays. The tape should be suitable for the supply chain and should not
          damage the outer surface of the shelf-ready packaging.
         l Folded flaps should be sealed. Unsealed folded or tucked flaps are not suitable.

         l The weight of outer cases must not be more than safety limits for manual handling. This

          will vary by product type. (See the EC regulation on Manual Handling Operations Directive
          90/269/EEC.)
         l If shrink-wrap is used, only clear LDPE (Low Density Polyethylene – polythene) or LLDPE

          (Low Linear Density Polyethylene – stretch-wrap) must be used. Clear LDPE/LLDPE can be
          recycled into products of any colour.
         l The ‘bullseye’ open ends of the shrink-wrap must be small enough to prevent any product

          falling out and to stop these openings being used as handholds.
         l Perishable products should be supplied in one of our range of plastic returnable crates.

         l It is necessary to introduce appropriate quality controls to maintain the highest standards

          of accuracy and effectiveness on packaging, labelling and barcoding.
         l Make sure packaging is appropriate to withstand the temperatures in chilled and frozen

          environments, as products may spend several hours in these conditions.
         l Certain high-risk products should have a red label clearly visible on the outer packaging for

          identification purposes.

          Outer-case packaging must meet the specifications detailed above or the relevant
          products may be rejected. If the product is rejected, you must pay the costs
          resulting from this.

         6.3.7 Pallet labels
         (A different specification is needed for automated depots. Please see section 6.5.3 for
         detailed requirements.)

         A correctly labelled pallet is essential for identification purposes at any point in the supply
         chain. Two pallet labels must be applied on both sides of each pallet, which clearly show:
         l your name

         l your alpha code

         l the delivery location

         l the delivery date

         l the unique pallet identification

         l the pallet sequence number and total number of pallets (for example, 1 of 26)

         l the delivery note number

         l the wave number (if chilled)

         l DCP quantity and detail of the product on the pallet.



         A table showing pallet label requirements can be found in Appendix 6 with an example of a
         label in Appendix 7. You must use this layout to organise the information.

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          l Palletsmust only show our required SSCC pallet labels.
          l Allother suppliers’ SSCC bar-coded pallet labels must be removed or covered to
          avoid them being scanned by our automated scanning systems.

          Self-adhesive labels for shrink-wrap or stretch-wrap must be able to be washed off
          during the recycling process.



         6.3.8 Outer-case labelling
         There must be clear identification on two sides of the pack. The information must not be
         obscured by pallet wrap, tape or any other packaging or printing.

         You must make all information as clear as possible – this is vital for our store colleagues.

         The product description must be in English, and use pictures and colours. Do not use
         abbreviations if possible.

         The label must show the following:
         l the size and weight of contents and the number of items contained

         l date coding, where this applies

         l item reference number – SKU/DCP

         l the gross weight of the unit, in line with EC regulations on Manual Handling Operations

          Directive 90/269/EEC
         l the appropriate TUC

         l barcodes on trade items (TUC) must meet GS1 UK specifications and must be visible and

          ‘scannable’
         l the supplier’s alpha code

         l relevant EC class marking for produce

         l relevant EC site mark for fresh chilled products

         l product code, batch code or lot number

         l breakpacks must be clearly marked ‘BREAKPACK’ on the outside of the packaging and

          should not be barcoded
         l special handling instructions and danger warnings

         l pressurised aerosols should be marked with legal storage requirements

         l material identification and recycling symbols.

         Please see our Shelf Ready Packaging Guidelines for more details.

         For produce only, all produce boxes and crates must be marked correctly in accordance
         with European Community Marketing Standards under the Agriculture and Horticulture
         Act 1964. Further information of requirements and instore inspections can be found at
         http://www.rpa.gov.uk – search for ‘Retailers Guide’.
         Each case of fresh produce received into store must have a label attached and an easily
         removable tab, to tear off and put on display. On these labels every day of the week is
         represented by a different colour – your technologist can provide further information.

          All of your outer-case labelling must meet the specifications detailed above or the
          relevant products may be rejected. You must pay the costs resulting from any
          rejected products.




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         6.3.9 Traded Unit Codes – TUCs
         A TUC is the barcode put on every case for identification purposes. All retailers have agreed
         that you must follow the industry barcode guidelines, which are set out by GS1.

         All our scanning systems can scan any barcode which meets these guidelines.

         Below is a brief summary of the requirements – for full details, please see GS1 documents at
         http://www.gs1uk.org

         Number
         l The TUC number must be agreed with your trading contact with us.

         Type
         l GS1-128 on any SKU with a shelf life of 42 days or less.

         l GS1-128 or ITF-14 or EAN-13 on any SKU with a shelf life above 42 days.

         l Please note that Elstree Depot cannot accept EAN-13 on an outer-case label.

         Application
         l One code must be used for labels.

         l One code must be used for drop-in cards on crates (please see Appendix 3).

         l Two codes must be used if printing onto boxes.

         Format
         l All codes must have a bar height of at least 32 millimetres.

         l All codes must have at least 7 millimetres light margins either side of the barcode.




         Quality assurance
         l Our trading department must check before the first delivery into the depot, allowing
          enough time to make any necessary amendments to barcodes.
         l All codes should be checked at appropriate times during production (the beginning, middle

          and end of the production run or at least every 30 minutes, whichever is the shorter).
         l All quality checks should include CEN/ANSI verification using an ISO compliant verifier.

         l All quality checks should include visual checks (please see Appendix 4 for visual checklist).

         l The quality assurance checks must be recorded (and should be kept for the life of the

          product).
         l Any cases failing these checks above should be relabelled before they are sent to us.



             You must obtain our approval for your TUC before the product launch. If you fail
             to do so, your product will not be ranged or it may be rejected at the depot.

             Your TUC must meet the agreed standard. If it does not do so, we may reject your
             product at the depot.



             If your product is rejected at the depot, you must pay the costs resulting from this.




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         6.3.10 Timeliness of deliveries
         It is essential that all deliveries meet the depot booking slots, which will be arranged as part
         of the ordering process.

         ‘On time’ is considered to be one hour either side of the arranged booking time. All goods
         going through the chilled network are expected to be delivered within specific waves. Failure
         by you to do so may result in the rejection of products. Please refer to section 6.5.2 for
         further details on waves.

          You must deliver product at the booking time. If you fail to arrive on time, we may
          reject the product or there may be a longer turnaround time.



          You must obtain a delivery booking reference and quote this at the time of delivery.
          If you fail to do so, the delivery vehicle may not be allowed into the depot.



          If your product is rejected at the depot, you must pay the costs resulting from this.

         Primary hauliers manage booking references on behalf of you. If you are a non-primary
         supplier, you will need to get booking references from the depot bookings team.

         If you have any queries about bookings, you should email: Depot.bookings@sainsburys.co.uk
         or phone 020 7695 3099.

          IMPORTANT: Your deliveries will be monitored for timeliness and if you continually fail to
          keep to specific booking references, we will charge you in accordance with the Conducting
          Business with Sainsbury’s document.



         6.3.11 Type of vehicle
         l You must not use flat-bed (open or uncovered) vehicles unless authorised by the regional

          supply chain office and your product technologist.
         l Depots can receive curtain-sided vehicles and box units. However, perishable chambers will

          not accept curtain-sided vehicles.
         l Depots can take articulated trailers as long as they can be offloaded from the back and do

          not have a tail lift. This includes curtain-sided vehicles.
         l Depots are not able to unload vehicles such as transit vans or similar.



          You must ensure that any products you supply to us are delivered in a type of vehicle
          acceptable to us, as detailed above.



         6.3.12 Quality standards

          All products that you supply to us must meet our minimum quality standards. These
          standards are that the products will comply with specification and all applicable
          legislation, be safe, fit for purpose and meet all requirements set out in our supply
          agreement.

         Our product quality inspectors or DEFRA quality inspectors may inspect the quality of




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         products at primary sites, depots or in our stores. Products will be inspected against the
         QAS or DEFRA marketing standards. Any product that does not meet our minimum quality
         standard or the relevant marketing standards may be rejected or, where appropriate,
         downgraded in class.

         Depot teams may check the goods for:
         l damage to the pallet

         l damage to the outer packaging, including crushing or dampness

         l contamination – raw and ready-to-eat products must be delivered on separate pallets

         l any other damage, including dents, breakages, leaks or spillages

         l signs of any damage caused by animals

         l signs of an unauthorised person using the lorry (for example, an illegal immigrant).



         If product is rejected we will provide you with a full report stating the product name, DD
         or UB code and an explanation of why it has been rejected (with photos where possible).
         Should a query then arise, your first point of contact would be your relevant Buyer.

          If your product is rejected at the depot or store, you must pay our costs resulting
          from this.



 6.4     Product withdrawals, rejections, claims and wastage
         Should you for any reason fail to meet the standards set out in section 6.3, we reserve the
         right to reject your product.

         The following section details this process.

         6.4.1 Wastage

          IMPORTANT: Subject to limited exceptions set out in this section, we will not directly or
          indirectly require you to make any payment to cover any wastage incurred at our stores.

         You must make payment to cover wastage where that wastage is due to your negligence or
         default. For these purposes, default or negligence includes – but is not limited to – failure to
         deliver products in accordance with our specification which results in wastage. Wastage for
         these purposes means product which becomes unfit for sale subsequent to it being delivered
         to us.

         We may also request that you make payment to wastage costs on the occasion of product
         trials and new-line implementation. In these circumstances the level of charge will always be
         negotiated with you in advance.
         We reserve the right to charge you the retail value of the products less VAT, a negotiated
         charge based on financial impact plus any handling charges.

          We will charge you for wastage if it is due to your negligence or default or where other
          wastage occurs and the level of charge is agreed in advance with you. We reserve the
          right, however, to charge you the retail value of the product(s) less VAT, a negotiated
          charge based on financial impact plus any handling charges.




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         6.4.2 Quality rejections at stores
         If significant quantities of a product do not meet the agreed standards instore, we may reject
         all or some of the affected delivery. If this happens, where appropriate, we will give you the
         following information:
         l relevant product details including, where possible, the use-by or best-before date, and batch

           information
         l the quantity of the product we are rejecting

         l the reason for rejecting the product

         l the retail value of the rejected product.



         Where possible, we will give you a reasonable opportunity to inspect or collect the rejected
         product before we dispose of it.



         6.4.3 Withdrawing products
         We will withdraw a product if there is a problem with its safety, legality or quality. We may
         withdraw all or specific batches of the product from stores and depots so they are no longer
         available for customers to buy. We will tell our colleagues whether they need to destroy the
         product or keep it until we give them further instructions.

         We have the right to withdraw more than just the affected batch or date code if we believe
         this is necessary to properly manage the incident.

         If we need to withdraw a product because it could be unsafe or illegal, each store will confirm
         to the store support centre that they have done this. We call this a ‘red-alert withdrawal’. In
         such cases, we will normally set our systems to prevent the product barcode scanning at
         checkout, to stop it from being sold to customers by mistake.

         We will charge you the retail value of the withdrawn product plus handling charges. VAT is
         added to the bulletin and branch handling charges. Serious incidents and public recalls may
         have extra costs.

         If we have to withdraw products frequently, we will see this as an ongoing control failure, and
         may treat it as a breach by you of your supply agreement with us. You will be liable for any
         loss or expense that we incur from this breach.

         A full documented investigation for each incident will be required and this must take place
         without delay.

         For more information on the incident process for Sainsbury’s Own Brand Suppliers, please see
         our Suppliers Technical Manual (HP002) at https://www.inspire-js.com




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         6.4.4 Product rejected at depot

         Non-primary

         If you manage your own deliveries into depots, your dedicated driver should stay at the depot
         while the product is being checked into the chamber. Your haulier must remove any rejected
         product from the depot on the same day it is delivered.

         Primary returns

         If you use primary distribution, the primary haulier is responsible for collecting the rejected
         product from depot and either returning product back to you, donating the product to charity
         (where possible) or disposing of the product in a licensed skip or through anaerobic digestion.
         The haulier will contact you for a decision on where the rejected product should go. You will
         pay or reimburse us the administrative costs associated with the return of this product.

         For both primary and non-primary loads, POD paperwork signed by the depot and driver are
         the only proof of delivery we will accept for disputing EDN debits.

         6.4.5 Queries on claims

         Full-pallet claims for primary suppliers
         For full-pallet claims, please contact our Supplier Development Team (contacts details are on
         http://www2.sainsburys.co.uk/sid – click on ‘info’, then ‘supply chain’ and ‘primary
         distribution’).

         You must provide the following information:
         l your name and alpha code

         l the hub operator you used

         l the date of incident

         l the reason for the claim

         l the collection point address

         l the delivery destination

         l the debit-note number

         l a copy of invoice to finance

         l a copy of POD

         l pallet IDs

         l the driver’s signature for collection (on the dispatch note and the collection note)

         l a copy of confirmation requesting delivery

         l if the product was returned, please confirm whether it was used again or disposed of.

          If it was disposed of, we will require a disposal certificate.

         Please remember that we cannot deal with any queries that do not follow these principles.

         We will try to answer all questions within eight weeks.

         Providing PODs for primary distribution suppliers through NFT and Profresh distribution

         NFT and Profresh are contracted transport companies managing Chill and Produce Primary
         Network deliveries from suppliers to our depots.




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           NFT and Profresh will process PODs and upload them to their websites within five working
           days of receiving products at the depot. This will be six days for deliveries to automated
           depots (Hams Hall and Waltham Point). This will allow you to download electronic copies of
           your PODs from the internet. Please note that this only applies if you use NFT or Profresh.
           For other primary hauliers, we will return PODs to you by post. If you are a primary supplier,
           you must request any missing PODs to the haulier within 14 days of delivery.

           For non-primary suppliers, the haulier must collect the POD at the delivery point, except at
           Hams Hall and Waltham Point, where the driver must collect the POD the next day. If required,
           you can obtain our depot copy of the POD from the depot’s stock audit department. You will
           have to pay an administration fee for this copy. For details on the POD query route, please
           refer to your relevant contact in primary.

           6.4.6 Shrinkage
           Our supply agreement with you contains no provisions under which you must make any
           payment to us as compensation for shrinkage.



     6.5   Non-standard delivery requirements

           The following section gives additional information on exceptions to the details outlined above.
           This includes specifics for chill, produce and automated sites.

           6.5.1 Chilled and produce chambers

           Returnable transit packaging (RTP) – crate rules (chill and produce)
           We are committed to moving most of our products into crates, which means we are not using
           cardboard. The main reason behind this is that plastic crates are stronger than cardboard
           boxes and will protect the products. They are also more environmentally friendly as the crates
           can be reused through the system.

           Where returnable packaging (green and black crates) is used, you are responsible for keeping
           it in good condition and for hygiene. The crates remain our property. Crates must only be used
           for the purpose for which they are intended. They should not be used for general storage or
           waste. We will be responsible for cleaning the crates after use.

           The information relating to the contents of the crate must be displayed using a recognised
           card in the inserts available. (Cards must be from a provider approved by us, e.g. Reflex
           Labels.) All cards must be faced outwards so we can scan the barcode. Any date codes should
           also be displayed on this card, along with the number of units in the crate.



            You must never use adhesive labels on our crates.

           Please see Appendix 3 for the crate-card specification.

           The Resource Recovery Unit (RRU) will record every crate transaction and this will be invoiced
           through our invoicing and payments system ‘Emptorious’. If you do not agree with the figures,
           you can use the Emptorious dispute process for the previous week’s crate deliveries. You must
           notify us of a dispute to the figures between Tuesday midday and close of business on
           Thursday after the dispute arises.




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         If you discover a discrepancy in the week of delivery, you must raise this immediately with the
         operator crate management team for them to correct the book stock.

         You are responsible for making sure that you receive a crate despatch note for the crates at
         your site.

         We will aim to carry out a stocktake at least once a year at your premises. If there are fewer
         crates than expected, we will charge you the retail cost of providing the extra crates needed.

         If you have any questions about the crates, please contact your product controller.

           IMPORTANT: If the figure on the crate despatch note is not questioned, or no supplier
           return note is fixed to the delivery note, the figure identified by us will be taken as correct.



         6.5.2 Wave adherence (chill only)

          Wave       Cut-off   Last booking slot   Display group
          Wave 1     9am       8am                 Cheese
                                                   Fats
                                                   Milk and juice
                                                   Yoghurts A
                                                   Yoghurts B


          Wave 2     11am      10am                Bacon and sausages
                                                   Cake
                                                   Cooked meats
                                                   Pies, pizza and pasta


          Wave 3     4pm       3pm                 Meat counters
                                                   Wave Ready meals
                                                   Red meats
                                                   White meats
          Wave 4     7pm       6pm                 Bread
                                                   Fish
                                                   Salads and fruit
                                                   Sandwiches


         All goods going through the chilled network have waved delivery profile. This means that the
         product can be instore by 5am and on shelf by 7am. This waved profile is outlined above.

          You must meet your designated wave. If you do not, we will reject the product.



          If your product is rejected at the depot, you must pay the costs resulting from this.



         6.5.3 Automated depot requirements

         Automated depots
         Stoke
         Rye Park
         Waltham Point Chill
         Hams Hall Chill




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         The automated sites require a unique pallet label in place of the pallet label, detailed in
         section 6.3.5

         Serial shipping container code (SSCC) pallet labels

             If you are delivering products to an automated distribution centre, you must include
             two identical SSCC pallet labels (compliant to the SSCC guidelines) on each pallet.
             The SSCC number is a unique identifier for each pallet and is an important part of the
             Advanced Shipment Notification (ASN).



         The SSCC guidelines are set out by GS1 UK and you can find full details at http://www.gs1uk.org.
         Examples of SSCC labels are also shown in our ASN technical manual on the SID website.

         The main guidelines are as follows:
         l GS1-128 SSCC barcode, printed at 50% magnification and in line with GS1 standards (32mm
          bar height, minimum 7mm light margins).
         l All barcodes must be quality checked and meet the minimum GS1 grade (see GS1 best practice

          documents).
         l Each SSCC number must be unique to an individual pallet and cannot be used again within

          12 months.
         l Two identical labels must be put on the sides of the pallet (one on the long side and one on

          the short side).
         l Labels must be placed no higher than 800mm from the pallet base and no lower than 400mm.

         l Labels must be applied flat and secured to the outside of the shrinkwrap. They should not be

          creased or crinkled.
         l The SSCC barcode needs to be applied horizontally.




         Diagram 1 - Label application and multi-stacked pallets




         The pallet labels must be put in a position so that our automated scanners can read the SSCC
         barcode. If delivering small-layered pallets, the pallet label should be applied so that the barcode
         on the label is visible on the side of the pallet. The text part of the label may be folded over the
         top of the pallet (see diagram 2).




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         Diagram 2 - Applying labels on small layers




             If you are supplying products to an automated distribution centre, pallets must only
             display our required SSCC pallet labels.
             All other suppliers’ SSCC barcoded pallet labels must be removed or covered to avoid
             being scanned by our automated scanning system.



         6.5.4 Advanced shipment notifications – ASNs

             There must be an ASN with all deliveries to the automated sites matching the
             specification below.

         ASNs are also required for all Red Prairie sites – for an up-to-date list of those sites running Red
         Prairie, please contact your supply chain contact.

         l A full ASN must be sent for all deliveries direct to the depot.
         l A planned ASN must be sent for all deliveries made through perishable hubs.
         l ASNs must accurately reflect the goods being shipped as well as the actual delivery details.

         l Direct deliveries need one ASN for every vehicle to each destination.

         l Every case and every pallet must be accounted for within the ASN.

         l Full ASNs must be available to the depot before the vehicle arrives.

         l Planned ASNs must be shipped as soon as the goods have been put on the collecting vehicle.

         l SSCC pallet IDs must be unique within a 12-month period.

         l ‘Best before end’ dates must be entered for all chilled products.



         There are two ways in which you can send ASNs to us:
         l If you need to combine your order processing and despatch systems with ASNs, use EDI. The
          DESADV details are in the EANCOM message standard. The technical details are available at
          http://www2.sainsburys.co.uk/sid/info_dep_asn.htm
         l If you do not want to develop a traditional EDI solution, web EDI is available. Web EDI allows

          you to produce ASNs and SSCC pallet labels, and is provided by us free of charge and includes
          a multi-user logon. We will charge you for extra logons.

         For more information, please see the ASN technical manual on
         http://www2.sainsburys.co.uk/sid/Documents/ASNTechManual.doc




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     6
         If you cannot send your ASN outside office hours, or you have any other queries outside office
         hours, please contact the destination depot for help.


          Routes to depot                      ASN responsibility                SSCC pallet label responsibility

          Direct to depot (ambient or chill)   Supplier                          Supplier
          Third-party ambient consolidator     The supplier must send the        Haulier Supplier
          Third-party chill consolidator       haulier a planned ASN. The
                                               haulier must send a full ASN to
                                               the destination depot.

          Haulier who picks ambient or         Haulier                           Haulier
          chill on the supplier’s behalf

          Ambient PCC                          PCC                               PCC



         6.5.5 Potato shipper label
         A correctly labelled potato shipper is important to help identify it at any time. You must put a
         plain piece of A4 paper into the correct document holder on the short side of the potato shipper.
         All self-adhesive labels must be able to be washed off and placed onto the A4 sheet of paper.
         Self-adhesive labels must not be applied to the plastic shipper.

         6.5.6 Foreign direct deliveries paperwork
         All delivery paperwork must contain the following (you must make sure that the CMR (Convention
         relative au Contrat du Transport International de Marchandises par Route) documents contain
         the following information and that the CMR document is typed so it is clear for the RDCs):
         l five copies (the European supplier keeps one copy)

         l depot address

         l UK supplier’s name, address and alpha code

         l European supplier name and address

         l loading address

         l temperature at point of loading and instructions during the journey (hand written)

         l time and date of loading

         l transporter’s name, i.e. “A Haulier”, vehicle number and trailer number

         l all information must be typed in English

         l product description, quantities and dept com numbers/SKU number

         l number of GKN pallets

         l date of delivery

         l temperature recorder log number from the last supplier loading (hand written)

         l 12-digit generic supplier invoice number, i.e. A12340003411 (Supplier alpha code, depot number,

          week and weekday)
         l Driver’s signature and driver’s name printed

         l seal number from the last departure site (hand written)

         l we also recommended that you provide a detailed delivery note and manifest

         l any claims for discrepancies sent to Supplier Queries at supplierqueries@sainsburys.co.uk

          should quote their 12-digit generic supplier invoice number, i.e. A12340003411 (Supplier alpha
          code, depot number, week and week day).

         Please see Appendix 7 and Appendix 8 (pallet labels and paperwork).

          You are responsible for ensuring that all foreign direct deliveries are accompanied
          by the paperwork we require, as detailed above.




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         6.5.7 Labelling multi-supplier pallets
         Multi-supplier pallets are pallets that have more than one supplier’s stock on them. These pallets
         must be marked up as ‘multi-supplier pallets’.

         6.5.8 Merchandised units
         If you are delivering merchandised units then you should shrink-wrap individual MU stacks. But,
         do not shrink-wrap two MU stacks together.

         6.5.9 Delivering product to ambient and frozen Primary Consolidation Centres (PCC)

         Our primary network consolidates and manages the inbound delivery of your ambient and
         frozen stock into our distribution network.

         Warehousing, distribution and administration charges are agreed as part of your PCC contract.
         This contract is negotiated between you and our Supplier Development Team.

         For further details, please contact our Supplier Development Team (contacts details are on
         https://www.sainsburys.co.uk/sid – Click on ‘info’, then ‘supply chain’ and ‘primary distribution’).

          With the exception of taking un-palletised stock off a container and then putting it into
          pallets, all products must be delivered to the PCC in a format that is acceptable to the
          depot network without PCC intervention.

         The agreement for using the primary network is with us. Day-to-day contact will be with the
         appointed operator for the PCC site. The PCC operator will be the first point of contact for
         operational issues, for example stock enquiries, booking-in products and proof of delivery (POD)
         documents. You should develop a close professional relationship with the appointed operator,
         and perform at least one stocktake per annum.

           IMPORTANT: Please note that the PCC operator is independent of us and we are not
           responsible for the acts or failures of the PCC operator, its servants or agents.

         If you need help relating to your relationship with the PCC operator, please contact the national
         PCC operations team. This includes issues relating to:
         l pallet and associated paperwork issues

         l operator performance

         l PODs and depot problems

         l site management

         l seasonal storage

         l stock damages or losses.



         The ambient and frozen Supplier Development Team is responsible for arranging the correct
         repayment for your use of a PCC (in line with the rates provided by the PCC operator).

         If you have any questions, please contact the Supplier Development Team as per the details
         above.

         Stock losses and insurance
         You are responsible for managing your stock until we have received the products at one of our
         depots. The PCC must be insured under current industry terms.




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          You must insure your stock independently from the time it is collected by or delivered
          to the PCC until it is received at the depot or is collected by a supplier or haulier
          (including in-transit insurance).

          We will not accept liability for loss or damage caused while the products are stored
          at a PCC.



         6.5.10 Perishable primary network

         Our primary network consolidates and manages the inbound delivery of chill and produce
         supplier stock into our distribution network.

         Warehousing, distribution and administration charges are agreed as part of your contract with
         us. This contract is negotiated between you and our Supplier Development Team.

         For further details, please contact our Supplier Development Team (contacts details are on
         http://www2.sainsburys.co.uk/sid – click on ‘info’, then ‘supply chain’ and ‘primary distribution’).



         6.5.11 Wine and spirit deliveries

         We operate a contract-managed bonded warehouse based in Dartford for receiving beers, wine
         and spirit deliveries. You must adhere to all standards and procedures detailed below to ensure
         that deliveries meet our specifications, and we can process them quickly and efficiently (or we
         may charge you, as detailed below). This allows product to be moved through the bond and
         onto stores efficiently, and reduces delays in the supply chain. Delivery standards to the bonded
         warehouse are the same as for deliveries to our depots. For more information, please see
         section 6 of this Handbook.

         Products will be delivered to bonded and regional depots. (Deep-sea products will be delivered to
         regional depots on chosen promotional lines. European products are also on chosen lines using
         Registered Excise Deliveries and Shipments (REDs).)

         World consolidation
         We have consolidation warehouses and cross-docking operations for most countries. These are
         run and supported by our chosen operator or freight forwarder for each country.

         1 Australia – Consolidation warehouse, Adelaide SA

         2 South Africa – Consolidation warehouse, Cape Town

         3 Chile – Consolidation warehouse, San Antonio

         4 Argentina – Cross-Dock, Mendoza

         5 New Zealand – Cross-Dock, Auckland

         Deep-sea consolidation is available at our chosen sites.

         The chosen operator or freight forwarder is responsible for product packed off site (i.e. outside
         of your premises).


53
     6   Delivering products continued                                                                      CONFIDENTIAL


          You will be responsible for products packed at your site (as detailed in section 6 of
          this Handbook).

         European Regional Collection

         France – regional collection

         Germany – regional collection

         Spain – regional collection

         Portugal – regional collection

         Italy – Consolidation warehouse, Verona

         In Europe, as with deep sea, the chosen operator or freight forwarder will be responsible for
         product packed off site (i.e. outside of your premises).

          We now have a number of different ways of ordering and shipping product; you must fully
          comply with these procedures. If you do not, we may reject the product at Dartford or
          our RDCs and you must pay any costs to us resulting from this. Explanations of these
          charges are outlined in the Conducting Business with Sainsbury’s document.



         Placing orders
         We will send or fax orders to you or your agent. We will also send these to the chosen freight
         forwarder at the same time.

         The orders will contain the following information:
         l an order number and the receiving depot’s address

         l product quantities

         l a product code

         l a product description

         l the required delivery date.



         We will ensure that, as far as is possible, our orders allow a reasonable amount of time for
         product to be transported.

           IMPORTANT: With the success of consolidation, most of your deep-sea operations will have
           stock at the consolidation sites that is ready to be exported.

         Promotion orders
         Promotion orders are on a longer lead time and your agents will be aware of these. You must be
         aware of the following:
         l Many promotional orders are placed manually due to limits of the system.

         l The supply controller will generate unique numbers and provide these to you and the freight

          forwarder or operator.
         l Operators will contact the supply chain controller when this product is ready for booking into

          one of our depots.
         l Operators will need to make a note of the booking reference and system-generated order

          number that they will receive. Please write these numbers on all invoices. Failure to do so may
          result in a delay in payment to you.


54
     6   Delivering products continued                                                                            CONFIDENTIAL


         Acknowledging orders
         If products are carried by a freight forwarder, the freight forwarder will phone, fax or email you to
         obtain the details of the order. Please make sure that you send these details back to the chosen
         freight forwarder as soon as possible.

         Details of the consignment will include the following:
         l an order number

         l the quantity of cases

         l an estimated ready date (if this applies)

         l the slip sheet or pallet (if this applies), and/or

         l the weight of the pallet.




          Upon request, you must send the freight forwarder the details listed above, as soon as
          possible.



         Loading requirements

          You must comply with the loading requirements detailed in section 6 of this Handbook.



         Transport requirements
         Once the order has been loaded, you must email the freight forwarder the following information:
         l a container number

         l an order number

         l the number of cases loaded

         l whether the products are loose, slip sheeted or palletised

         l a seal number

         l the intended vessel (if crossing the sea), and/or

         l confirmation that documents are on the last pallet for EU suppliers.



          Once an order has been loaded, you must email the freight forwarder the information
          detailed above.

         Whether you buy products ex cellars or FOB, you must comply with your responsibilities to us
         under compulsory international conventions, which are that you must:
         l not to go over weight limits

         l allow the freight forwarder access to check the loading (to avoid mistakes), and/or

         l load products in a way that will make sure they are safe. This will include using dunnage, when

          necessary, to fill in any gaps left either behind the loaded pallets or at the back of the equipment.

          You must adhere to our conditions of carriage and the compulsory international
          regulations as detailed above. If you do not, we may reject the product at Dartford or
          our RDCs and you must pay any costs to us resulting from any breach. Explanations
          of these charges are outlined in the Conducting Business with Sainsbury’s document.




55
     6   Trading with you continued                                                                               CONFIDENTIAL


         If a load is not in good enough condition to unload at any of our depots, we may do the following
         (in addition to our other rights under our supply agreement with you, such as reject the delivery):
         l Take photographs at the scene and then take the goods to another bonded depot for the load

           to be unloaded by an outside agency. This in most cases will be a depot chosen by the freight
           forwarder. You must pay any costs to us resulting from this. In addition, it is worth noting that
           loads that arrive at the bond requiring off-site reworkings must be taken to a registered HMC site
           and returned to bond within 48 hours to satisfy customs regulations. Explanations of these
           charges are outlined in the Conducting Business with Sainsbury’s document.
         l If the products are not on pallets, we may put them on pallets, shrink-wrap them and deliver them

           to the relevant depot. We may charge you for any extra costs to us resulting from this. Explanations
           of these charges are outlined in the Conducting Business with Sainsbury’s document.

          You must ensure that the products are in a good enough condition to be transported, and
          reach our depots still in this good condition, or we may take the action detailed above.

         Paperwork

          Once equipment has been loaded, you must seal it before it leaves your premises, and you
          must write the seal number on the freight forwarder’s document, supplier invoice and AAD
          (if this applies). You must fill in the AAD documents correctly.

           IMPORTANT: Our excise number is GB00660454836 for REDS DEPOTS & GB00004323068
           for Dartford bond.

          You must put the AAD in a large envelope and write ‘AAD DOCUMENTATION’ on it. You
          must then attach the envelope to the last pallet on the vehicle. The driver of the vehicle
          delivering the goods must carry a copy of the AAD and give it to the depot when they
          arrive there.



          If loads are from outside of the EU, you must send the invoices (V11 form and bills of
          landing) to the freight forwarders at least one week before it arrives at a port. If you fail
          to deliver the product with the correct paperwork, causing delays in either unloading or
          the product being available, we may reject the product and you or the freight forwarder
          may be charged for any resultant costs to us. If any loads are rejected at Dartford Bond,
          we will notify HMC of the customs registered address the load will be delivered to for
          reworking. Explanations of these charges are outlined in the Conducting Business with
          Sainsbury’s document.



          Sainsbury’s holds the supplier responsible for reading and understanding the relevant
          preferential rules of origin and ensuring that any goods covered by a preference certificate
          fully comply with those rules. If a GSP or EUR1 certificate is found to be invalid,
          Sainsbury’s will charge on to the supplier any additional duty and penalties resulting from
          presentation of the said certificate to the UK Customs authorities. These additional
          charges may be made up to three years retrospectively.




56
7    7     Getting it right - delivering products direct to stores                                                 CONFIDENTIAL




     7.1   Receiving products in stores through the retail stock system (RSS)
           All deliveries must go to the store location as agreed with the Buyer, and your representative must
           wait while the delivery is recorded as follows.
           l Our colleagues will scan in the full delivery. If you are on a “Receive All” Contract, one SKU only

            is scanned and the RSS Handset prompts our store colleagues to receive the whole delivery
            without scanning all products.
           l Any products not ordered may be returned to you.

           l Once the delivery has been scanned, a draft RSS delivery note will be printed and the colleagues

            will confirm the number of items received with your representative.
           l A final RSS delivery note will be printed off and given to your representative. This confirms the

            contents of the delivery and is what you must invoice.

           Your representative must agree the details before leaving the store. This is because we will only
           pay for the products on the receipt.

            IMPORTANT: We will not stamp or sign your paperwork. The final RSS delivery note is the POD.

           We have the right to reject any unordered products (including product substitutions) and will
           amend the delivery note to reflect these changes.

     7.2   Goods delivered by couriers
           If your representative is not present, you should follow the process below.
           l The courier should get a signature from a colleague, and also have them write their name on

             the courier note for the total number of items delivered. It will be amended by the store if it is
             not correct. The store name and number must also be clearly shown.
           l Your delivery note is removed from the items.

           l The delivery is received in RSS using the actual delivery date.

           l The store will tell you about any shortages or substitutions within 24 hours.

           l You must amend the invoice before you send it to us. You must not send us a credit note.



            IMPORTANT: By choosing to use a courier and not accept the RSS final delivery note, you will
            lose the right to challenge any deduction made for shortages or differences in quantity. By
            choosing not to wait and agree the delivery, you must rely on our store count as being accurate.
            We have the right to reject all goods that were not ordered or are damaged.



     7.3   Returns from stores
           You must provide the store with a unique returns authorisation number, which should be on the
           paperwork and on the credit note. All returns will be debited and deducted in line with your
           payment terms.




57
     7     Getting it right - delivering products direct to stores continued                                   CONFIDENTIAL


     7.4   Advance Shipment Notifications (ASNs)
           An advanced shipment notification (ASN) is an electronic message that allows you to provide
           information to the person receiving the delivery. This information tells the person receiving the
           delivery all the invoice details, commodity information and associated shipment quantities. The
           main function of the ASN is to speed up the receiving and invoice-matching process. It also has
           the following added benefits:
           l quicker driver turnaround time with ‘receive all’ process

           l more accuracy

           l improved match and clear rates, leading to less payment queries and faster payment

           l orders being delivered are available on store PC screens.



           We prefer to use ASNs; however, if a supplier does not provide an ASN, or the ASN fails to reach
           the store, then we will follow the receiving process in section 7.1. For more information, please
           contact your trading representative.




58
     APPENDICES                                                                                                   CONFIDENTIAL




     Appendix 1: Contact details

     l For any queries about receiving your EDI orders, please contact:
     Supply chain central systems
     0845 603 6279
     sc.centralsystems@sainsburys.co.uk

     l For any queries about your orders, relating to amounts on the orders, the products, the delivery

     date and time, or delivery destination, please contact:
     Your supply chain controller

     lFor any queries about bookings, please contact:
     depot.bookings@sainsburys.co.uk
     020 7695 3099

     lFor any queries about our crates requirements, please email:
     The central logistics crate development team
     uk.sainsburys.amt@kuehne-nagel.com

     l For any queries about primary distribution, please see the contact list on the ‘SID’ website at:
     http://www2.sainsburys.co.uk/sid or our new b2b portal ‘Touchpoint’ at https://touchpoint.sainsburys.co.uk

     l To have the TUC, CUC or pallet label barcodes checked, please send them to:
     Trading Systems
     Barcode Verification
     Mailbox 5/06
     Sainsbury’s Store Support Centre
     Holborn
     EC1N 2HT
     barcode.queries@sainsburys.co.uk

     l For detailed information about barcoding standards, please contact:
     GS1 UK
     020 7092 3500
     info@gs1uk.org.uk
     http://www.gs1uk.org

     lIf you cannot transmit your ASN outside office hours, or you have any other queries outside office
      hours, please tell the destination depot.

     Hams Hall 01675 435 800                Waltham Point 01992 766 000
     Stoke 01782 574 700                    Rye Park 01992 476 000

     l For any queries about the automated depot compliance requirements, please contact:
     Central Supply Chain ASN Team
     020 7695 7732 (9am–5pm, Monday–Friday)
     dependencies.queries@sainsburys.co.uk
     Hams Hall Compliance Team 01675 435 808
     Rye Park Compliance Team 01992 476 053
     Stoke Compliance Team 01782 574 792
     Waltham Point Compliance Team 01992 766 016


59
     APPENDICES continued                                                                                         CONFIDENTIAL


     l   For any queries about CARES, contact the Buyer.

     lFor all financial queries, please phone our one-stop shop (supplier support line) on 0845 603 6287
     or email supplierqueries@sainsburys.co.uk

     Kuehne and Nagel contacts for the Sainsbury’s contract
     Resource and recovery units, wash sites and asset-holding sites




     Basingstoke RRU                             Sainsbury’s Asset Management Team            Waltham Point RRU
     Unit D Caballero Buildings                  Kuehne and Nagel Ltd Network II              Fleming Road
     Knights Park Road                           Bransworth Avenue                            Waltham Point
     Houndsmill Industrial Estate                Brinklow                                     Waltham Abbey
     Basingstoke                                 Milton Keynes                                Essex
     Hants                                       MK10 0BG                                     EN9 7BY
     RG21 6XE                                    Phone: 01908 257 060                         Phone: 01992 703 470/4
     Phone: 01256 307 150                        Email:                                       Fax: 01992 703 475
     Fax: 01256 307 155                          uk.sainsburys.amt@kuehne-nagel.com
                                                                                              Northern Ireland
     Emerald Park RRU                            Langlands Park RRU                           Robipak Wash Site
     Follybrook Road                             Hurlawcrook Road                             14 Michelin Road
     Emersons Green                              Langlands Park                               Hyde Park Industrial Estate
     Bristol                                     Industrial Estate                            Newtown Abbey
     Avon                                        East Kilbride                                County Antrim
     BS16 7AB                                    G75 0ZZ                                      BT36 4ET
     Phone: 01179 104 150                        Phone: 01355 581 775/6                       Phone: 02890 841 396
     Fax: 01179 104 155                          Fax: 01355 581601                            Fax: 02890 342 936

     Hams Hall RRU                               Northampton RRU                              Spain
     Canton Lane                                 Style Way                                    Transportes Argos,
     Coleshill                                   Pineham Park                                 S.L. Autovía Del Mediterráneo
     Birmingham                                  Swan Valley                                  N-340 -Pk 639,300 30892
     West Midlands                               Northampton                                  Librilla Murcia
     B46 1AL                                     NN4 9BX                                      España
     Phone: 01675 433 210                        Phone: 01604 682 482                         Phone: 00 34 902 40 32 11
     Fax: 01675 433 215                          Fax: 01604 682 591                           Fax: 00 34 902 35 44 00

     Haydock RRU                                 Swanley RRU
     Hall Wood Avenue                            Units 1B/1C
     Haydock Industrial Estate                   Pedham Place Industrial Estate
     Haydock                                     Wested Lane
     St Helens                                   Swanley
     Merseyside                                  BR8 8TE
     WA11 9WA                                    Phone: 01322 663 220
     Phone: 01942 295 151                        Fax: 01322 663 323




60
     APPENDICES continued                                                                                                        CONFIDENTIAL


     Appendix 2a: Glossary of terms
      Alpha code               A unique reference number for suppliers. It is used to identify deliveries and payments
      Ambient products         Products that do not need any special handling in terms of temperature-controlled storage
                               The two-, three- or four-digit number that describes the information that immediately follows it
      Application identifier
                               in a GS1-128 barcode
      ANA code                 Electronic data interchange mailbox number
      ASN                      Advanced shipment notification. This is an electronic notice containing details of the goods on a delivery
      BDI                      Business Development Initiative
      Board                    Pallet
      Booking reference        The day and time slot on which a vehicle is scheduled to deliver products to a distribution centre
      BRC                      British Retail Consortium
                               CEN/ANSI is an internationally recognised verification standard. It ‘measures’ a barcode to find out whether or
                               not it has been printed in the correct way. The standard is made up of a grading system from A to F
      CEN/ANSI verifier
                               A to C = a pass (with grade C being a low-grade pass where any further deterioration in quality may result in a fail)
                               D to F = a fail
      CIS supplier             A supplier who is a member of the Construction Industry Scheme
      Consumer unit            An item that may be sold at a retail point of sale. Also referred to as a retail trade item
      DCP                      Department, commodity code or pack
      EANCOM                   One of two data languages used with EDI and CFE
      EDN                      External Delivery Note. Used when a supplier needs to uplift stock from a Sainsbury’s depot
                               Ethical Trading Initiative Base Code. The ETI Base Code and the accompanying Principles of Implementation,
      ETI Base Code            both of which were negotiated and agreed by the founding trade union, NGO and corporate members of ETI
                               form the basis of the standards applied to all our factories. One of two data languages used with EDI and CFE
      Ex Cellar                A term dealing with the shipping of goods
      FOB                      Free or Freight On Board. A term dealing with the shipping of goods
      GS1 UK                   Organisation responsible for maintaining standards for barcoding and EDI in the UK
      GLN code                 Global location number – electronic data interchange mailbox
      GSCOP                    The Groceries Supply Code of Practice (also known as ‘The Code’)
                               Global trade item number. The unique number for a product line. This number is used in a barcode and electronic
      GTIN
                               data interchange messages
                               Hazard Analysis & Critical Control Points. A systematic preventive approach to food safety and pharmaceutical
      HACCP                    safety that addresses physical, chemical and biological hazards as a means of prevention rather than finished
                               product inspection
      Hub                      A depot where suppliers’ goods are received and then delivered to distribution centres
                               The International Labour Organisation (ILO) uses international labour standards in the form of international
      ILO conventions
                               labour conventions and recommendations, which are international treaties
      ISO                      International Standards Organisation
      Ladder orientation       Printing the barcode so that the bars are horizontal to the base of the product
      Light margins            The clear spaces needed to the left and right of any barcode symbol
      MLOI                     Minimum life on issue to store
      MLOR                     Minimum life on receipt to depot
      Non-perishable           Products that can be transported and stored in ambient conditions
      Outer case               A traded unit
      Pallet label             The GS1 labels used to track and identify pallets
      Primary Consolidation    A warehouse where goods from several suppliers are received and stored centrally before
      Centre (PCC)             they are distributed
      Perishable               Products that need temperature control during transport and storage (other than frozen food)
      POD                      Proof of delivery. This is normally a signed delivery note confirming that an RDC or store has received the goods
      REDS                     Registered excise deliveries and shipments
      RDC                      Regional distribution centre



61
     APPENDICES continued                                                                                                      CONFIDENTIAL


     Appendix 2a: Glossary of terms

     RRU                     Resource recovery unit
                             Returnable Transit Packaging, also as crates. We are committed to moving most of our products into
                             crates, which means we are not using cardboard. The main reason behind this is that plastic crates are
     RTP
                             stronger than cardboard boxes and will protect the products. They are also more environmentally
                             friendly as the crates can be reused through the system
     SKU                     Stock-keeping unit. This defines or identifies a product
     SSCC (Serial Shipping   The serial shipping container code is a unique ‘licence plate’ identification for a pallet of
     Container Unit)         assembled goods
     Symbology               A type of barcode symbol
     Tradacom                One of two data languages used with EDI and CFE
                             An item that is priced, ordered and invoiced between manufacturers, retailers and wholesalers. Also
     Traded unit
                             known as an outer case or a trade item not crossing a retail point of sale
     TUC                     Traded unit code. This is the GTIN, converted into a 14-digit barcode by adding a leading digit
                             A unique reference we give to you or your haulier for a delivery to a particular depot.
                             For ambient deliveries, the reference is part of the purchase order number.
     Vehicle ID
                             For perishable deliveries, the vehicle ID is issued separately to the purchase order.
                             The vehicle ID is an important part of the ASN number for deliveries direct to the depot




     Appendix 2b: Glossary of systems

                             Complaints, analysis and response system. This collects information about customer complaints made
      CARES
                             in stores and in call centres
      Cost-price File        Weekly process through which we check the latest prices in our cost-price database against those
      Exchange (CFE)         held in your invoicing system
                             E-sourcing is a simple online negotiation process that is a fair and open way to help support supply
      E-sourcing
                             decisions. Traders have the option of using e-sourcing to negotiate the cost of products and services
                             Electronic data interchange. This links our legacy systems with suppliers’ systems. It passes messages
      EDI
                             between these systems (purchase orders, invoices, ASNs, other business documents)
      Emptorius              Emptorius is the primary distribution finance application for data entry and self-billing
      GDSN                   Global data synchronisation network
                             A data suite providing: a) Product Performance Management (PPM) supporting the analysis of
                             poor-performing products via a range of metrics including SKU/store data, and b) Alerting and
      HORIZON
                             Resolution Management (ARM), an exception-based reporting tool which automatically alerts
                             you and us by email when products breach pre-defined thresholds
                             If you supply us with own-brand product, INSPIRE has been developed for management and incident
      INSPIRE                reporting to encourage your compliance to all our current and future product development needs,
                             ranging from simple recipe generation to full adherence to our brand standards
                             Performance data site. It enables you to view daily commodity data across a wide range of measures
      PDS
                             including sales, stocks and customer availability. Value-added network
      RSS                    Retail stock system. A system used by our stores to receive all deliveries
                             Sainsbury’s Information Direct. This is our website containing information about the supply chain
      SID
                             (http://www.sainsburys.co.uk/sid)
                             Internet portal allowing B2B communication between Sainsbury’s and suppliers. Touchpoint replaces
      Touchpoint
                             SID as our B2B portal in February 2010
      VAN                    Value-added network. A type of data transmission option used within EDI




62
     APPENDICES continued                                                                                      CONFIDENTIAL


     Appendix 3: Crate drop-in cards

     All drop-in cards for barcoding crated SKUs must meet the following standards.

     Label sizes by crate type
      Crate type    Crate description         Base dimensions     Card width          Card height
                                              (millimetres)       (millimetres)       (millimetres)

      2             Universal                 600 by 400          118                 78
      3             Universal Half            400 by 300          118                 78
                                                                                      78 (see note one
      11            Universal Shallow         600 by 400          118
                                                                                      below)
      4             Maxinest Deep             600 by 400          127                 55
      5             Maxinest Standard         600 by 400          127                 55
      14            Maxinest Shallow          600 by 400          127                 55
      15            Maxinest Flat             600 by 400          127                 55
      6             Maxinest Half             400 by 300          127                 45
      16            Maxinest Shallow Half     400 by 300          127                 45
      30            Maxinest Mushroom         400 by 300          127                 45
      25            Potato Shipper (Black)    800 by 600          127                 45
                                                                  134 (see note two
      47            Polymer Egg Shipper       800 by 600                              76
                                                                  below)


     Note one
     The actual height of the card can be 55 millimetres (mm), but in order to make specifications more
     simple, suppliers should have 78mm card with perforation 23mm from bottom.
     Note two
     Contact the national compliance team if you are having difficulty producing labels this wide.

     Card characteristics
     GSM – Minimum 200 – Maximum 240 Colour – black TUC on white background (no other colour criteria).
     You do not need to have lugs on cards. We will accept cards with straight edges.

     Applying cards
     Place cards in the holders on the long side of universal shallow crates.

     You should fold the universal shallow-crate card over to make the card 55mm high, and then put it into
     the holder. This is easier if you use both universal and universal shallow crates. Make sure cards are
     behind all lugs on crates so they do not fall out while being delivered to our stores.

     Please remember
     Cards referenced here are for shippers, product information and TUCs. Shippers also need pallet labels.

     Text information you need
     l Product SKU and DCP number

     l Product description

     l Supplier code

     l Use-by information

     l Country of origin




63
     APPENDICES continued                                                                                          CONFIDENTIAL


     TUC requirements
     l GS1-128, with date encoded, for products with a shelf life of less than 42 days

     l Magnification factor should be 48.7% (50% in practice); however, catch-weight lines should be 35%

     l Bar height should be 32mm (not including numbers printed underneath)

     l Light margin should be 7mm on both sides

     l You should print the code at the top of the drop-in card, with text information underneath.



     It is possible to print a TUC with a bar height of 32mm on a 45mm high drop-in card. If you have problems
     with this, please contact the national compliance team.
     For more information on TUCs, please visit http://www.GS1uk.org



     Appendix 4: Printing barcodes – checklist
     You should carry out the following checks with your verification process:
     l Are the barcode numbers correct?

     l Is the code at least 32mm high?

     l Are the light margins clear and the correct size?

     l Are the colours OK, or is the colour combination OK?

     l Does the code ‘look’ good?

                l There no horizontal or vertical white lines

                l There no ‘flecks’ in bars or bits of the bar missing



     You will also need to make sure the correct TUC numbers are on the case:
     l Two numbers if pre-printed
     l One number if on a label or a drop-in card.



     Is the position of the barcode OK? Make sure the code is not covered by tape or shrink-wrap.

     If you have answered ‘No’ to any of the questions above, you will need to print your codes again or
     reposition your codes on your outer case.
     If you have answered ‘Yes’ to all the questions above, and the codes pass verification, we will be ready to
     accept your outer cases for TUC scanning.

     Please remember that these checks are designed to work with your verification procedures.
     This advice is based on the GS1 general specifications, which were correct and up-to-date at the time this
     document was published. For full details, please see GS1 documents at http://www.gs1uk.org




64
     APPENDICES continued                                                                                               CONFIDENTIAL


     Appendix 5a: Delivery notes – format

     The following table shows information we need for our paperwork. You should use this layout to
     organise the information.



                                                                            How and where the information should
     Information we need     Requirements
                                                                            appear and other information
     Supplier name           A space for this called ‘Supplier Name’        Placed at the top-left corner
     Supplier alpha code     A space for this called ’Alpha Code            Placed at the top-left corner
     Supplier address        On document                                    Placed at the top of the page
                             A space for this called ’Delivery Depot’.
                             There is a list of our depot titles in
     Delivery depot                                                         Address of the depot.
                             appendix 4 in the ‘working together’
                             document on the SID website
     Delivery date           A space for this called ‘Delivery Date’        DD/MM/YY format
                             There is a space for this called ‘Delivery     In bold. In the top-right corner. Ideally
     Delivery Note number    Note No’. You can have ten characters.         eight characters
                             New suppliers have eight characters
                             A space for this called ‘Product Wave’. This
     Product Wave
                             is for deliveries into chill networks only
                             A space called either ‘DCP’ or
                             ‘Commodity’. There should be a space
                             between each part of DCP (for example,
                                                                            SKU code. Nine- or 12-digit DCP format.
     DCP                     132/456/012), or use a 12-digit format
                                                                            Product description
                             with zeros at the beginning (for example,
                             0123/0456/0012). Only relates to those
                             despatched on consignment
                             A space for this called ‘Despatched            Quantity should be a whole number. (No
     Quantity                Quantity’. Despatched quantities in cases      decimal points)
                             depend on the DCP
                             A space for this called ‘Number of
                                                                            Below case quantities
     Number of Pallets       Pallets’. One total relating to depot
                             consignment. Near bottom of page
                             A space for this called ‘Pallet IDs’. List
                             the unique numbers to consignment
     Pallet IDs                                                             Placed near the bottom of the page
                             (the smallest first)’. Show the actual
                             pallets delivered
     Signature Space         A space for this called ‘Signature Space’
     Depot Stamp Area        A space for this called ‘Depot Stamp Area’
                             Two identical delivery notes to arrive
     Other requirements                                                     The second copy is a carbon copy
                             at depot




65
     APPENDICES continued                            CONFIDENTIAL


     Appendix 5b: Standard Delivery Note – example




66
     APPENDICES continued                                                                                                       CONFIDENTIAL


     Appendix 6: Pallet label requirements

     The following table shows information that you must include on pallet labels. You should use this layout to organise the
     information.
     Please remember that the requirements for pallet labels here are for manual depots only.


                                                                                          How and where the information should
      Information we need     Requirements
                                                                                          appear and other information
      Supplier Name           A space for this called ‘Supplier Name’                     Placed at the top
      Supplier Alpha Code     A space for this called ‘Alpha Code’                        Placed at the top
                              A space for this called ‘Delivery Depot’. There is a list
      Delivery Depot          of our depot titles in appendix 4 in the ‘working
                              together’ document on the SID website
      Delivery Date           A space for this called ‘Delivery Date’                     DD/MM/YY format
                              A space for this called ‘Pallet IDs’. Random unique         Can be an SSCC format (see note below).
      Pallet IDs
                              numbers matching consignment and paperwork                  Automatically printed on the label
      Pallet Sequence         A space for this called ‘Pallet Sequence Number’. This
                                                                                          Automatically printed on the label
      Number                  is on the label. For example, 1 of 4, 2 of 4 and so on
                              A space for this called ‘Product Wave’. This is for
      Product Wave                                                                        Placed at the top of the label
                              deliveries into chill networks only
                              A space for this called ’DCP’. There should be a space
                              between each part of DCP (for example, 132/456/012).        12-digit format (dddd cccc pppp).
      DCP
                              Start with the smallest number first. Quantities            14 characters long
                              associated with the DCP on the pallet

                              Two labels on each pallet. One placed on short side of      Same height location on the pallet as at
      Other requirements
                              the pallet, one on long side of the pallet                  automated sites




     Appendix 7: An example of a pallet label




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     Appendix 8: Details of the depots

      Site             ANA Code          Postcode   Ambient    Chill    Produce   Frozen    Floral
      Allington        5010011090227     ME16 0LY              X
      Basingstoke      5010011090036     RG21 6XW   X          X        X
      Belfast          5010011090214     BT3 9JL    X          X        X
      Charlton         5010011090065     SE7 7SH    X                   X
      Dartford         5010011090117     DA1 5PR    X
      Elstree          5010011090146     WD6 1SN                                  X
      Emerald Park     5010011090706     BS16 7FQ   X          X        X
      Feltham          5010011090191     TW14 0XQ   X          X        X
      Hams Hall        5010011090269     B46 1AL    X          X        X
      Haydock          5010011090395     WA11 9WB   X          X        X
      Langlands Park   5010011090751     G75 0QH    X          X        X
      Maltby           5010011090094     S66 8EL    X          X        X
      Middleton        5010011090531     M24 2RW               X
      Northampton      5010011090382     NN4 9BX    X          X        X
      Rugby            5010011090780     CV21 1TG   X
      Rugby Floral     5010011090159     CV21 1TG                                           X
      Rye Park         5010011090489     EN11 0EZ   X
      Sherburn         5010011090081     LS25 6JH   X          X        X
      Skelton          5010011090052     TS12 2LQ   X          X        X
      St Albans        5010011090120     AL2 1AY    X          X        X
      Stoke            5010011090340     ST4 4EX    X
      Stone            5010011090308     ST15 0SD                                 X
      Tamworth         5010011090162     B77 5BP    X          X
      Waltham Point    5010011090379     EN9 3BZ    X          X        X



     There is more information on depot addresses at http://www2.sainsburys.co.uk/sid/locations/locations.htm




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     Appendix 9: Example Proof of Delivery (POD) paperwork

     Appendix 9a: POD standard deliveries – signed, stamped receiving note




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     Appendix 9b: POD chilled deliveries – signed, stamped Delivery Note (including Wave Number)




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     Appendix 9c: Red Prairie depots – signed, stamped receiving note




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     Appendix 9d: POD direct to store deliveries – RSS Delivery Notee




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     Appendix 10: Supply chain temperature requirements

     These temperatures apply to all perishable loads received into distribution centres

                                                                    Min ºC     Target ºC   Max ºC
     PROVISIONS (except those listed below)                         -2         +3          +5
     hard cheese, sandwiches                                        -2         +3          +8
     bacon                                                          -6         +3          +5
     fresh yeast (instore bakery)                                   0          n/a         +8
     preprepared vegetables, fruit and salad depts 871,879,890      +1         +3          +5



     FROZEN PRODUCTS                                                no limit   -23         -18



     MEAT, FISH, POULTRY (except those listed below)                -2         0           +3
     fresh live mussels                                             -2         0           +7
     prawns (previously frozen)                                     -6         0           +3
     Previously frozen commodities in dept 617 (further processed
                                                                    -6         0           +3
     poultry), 624 (summer eating) and dept 419 (burgers)


     FRESH PRODUCE (except those listed below)                      +2         +7          +12
     bananas and plantains                                          +12        +14         +19
     pineapple, mangoes, paw paws, aubergines, courgettes           +6         n/a         +16
     pears                                                          0          n/a         +12
     fresh dates (previously frozen)                                -10        n/a         +10
     tomatoes, cucumbers, peppers                                   +5         n/a         +18
     bulb onions                                                    +2         n/a         +15
     potatoes (main crop and loose new, Oct – Mar)                  +5         n/a         +16
     potatoes (loose new, Apr – Sept)                               +5         n/a         +22
     pot plants (house plants)                                      +8         n/a         +18
     bulbs, pot herbs                                               +8         n/a         +18
     cut flowers                                                    +1         +5          +10




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     Appendix 11 – Common error messages for rejected EDI invoice files

     Common Reference (CRF) – wrong purchase order format
     Invalid Product Codes (PRD) – TUC does not exist in Sainsbury’s system
     Location Code (LOC) – location code blank or invalid
     Date (DAT) – invoice date is in the future. Sainsbury’s does not accept advance invoicing
     File Balancing (FB) – amounts on the file do not add up correctly
     Document Balancing (DB) – value of invoice does not add up correctly
     Sequencing (SEQ) – file out of sequence
     TYPE – correct the MHD / TYPE segment using a valid APRF and resend file
     TCDE – correct the TYP / TCDE and resend file
     SDT/SIDN – use your own EAN Location Number then resend file
     SDT/SIDN – use the correct Sainsbury’s supplier code then resend file
     SNAM – use correct Supplier Name then resend file
     VATN – use Supplier VAT registration number then resend file
     CIDN – populate Sainsbury’s EAN location number field with a valid Customer’s EAN Location Number
     then resend the file
     CNAM – populate Buyer Name field then resend the file
     CLOC – populate this field with the EAN Location Number then send this record again
     INVN – field blank or contains invalid format. Correct then resend this record
     IVDT – as you have either left this field blank or have sent an invalid format, please correct and resend
     this record again
     TXDT – field blank or contains invalid format. Correct then resend this record
     ORNO – field blank or contains invalid format. Correct then resend this record
     ILD/SPRO – EAN number is incorrect. It must be 13 characters. Correct then resend this record
     ILD/SPRO – DUN (TUC) number is incorrect. It must be 14 characters. Correct then resend this record
     UNOR – field blank. Populate then resend this record
     QTYI – field blank or contains invalid format. Correct then resend this record
     AUCT – field blank or contains invalid format. Correct then resend this record
     LEXC – field blank or contains invalid format. Correct then resend this record
     VATC – field blank or contains invalid format. Correct then resend this record
     VATP – field blank or contains invalid format. Correct then resend this record



     Appendix 12 – Index of deduction codes as they will appear on your remittance advice

     Customer complaints (CARES)            Six digits, starting with a 3
     Fixed deals                            Starts with FD
     Complex deals                          Starts with CD
     Retro promotions                       Starts with RP
     External delivery notes                EDNs have various invoice references. Always shown in the
                                            supplier reference field of the relevant CSV file
     Invoice matching                       Starts with DB
     Primary distribution                   Generated through the Emptorius system. Begins PD
     ARIR                                   Accounts Receivable Invoice Request. Begins ARIR




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     Appendix 13 – Documents that are incorporated into your Trading Terms with us

      Document                                                   Location
                                                                 http://www.competition-commission.org.uk/
      Code
      (i.e. the Groceries Supply Code of Practice)
                                                                 inquiries/ref2006/grocery/pdf/revised_gscop_order.
                                                                 pdf
      Corporate responsibility programme                         http://www.j-sainsbury.co.uk/cr
      Conducting Business with Sainsbury’s document              https://touchpoint.sainsburys.co.uk
      Sainsbury’s Supplier Payment Queries: Help us to Help
                                                                 Ask Buyer for a copy
      You pack
      Trading Finance Platform (TFP) information                 http://www.primerevenue.com/sainsburysTFP
                                                                 https://www.inspire-js.com (for charge structure)
      Guiding You. CARES and Supplier Charging Suppliers Guide   http://www2.sainsburys.co.uk/sid/CaresReporting.
      (TG004)                                                    htm and https://touchpoint.sainsburys.co.uk (for
                                                                 accessing data)
                                                                 http://www.ethicaltrade.org and
      Code of Conduct
                                                                 http://www.j-sainsbury.co.uk/cr
      Packaging brand standards                                  https://www.inspire-js.com
                                                                 http://www2.sainsburys.co.uk/sid or
      Business continuity plan details                           https://touchpoint.sainsburys.co.uk
                                                                 – the Library section > Sainsbury’s Business Practices >
                                                                 Supply Chain – Trading with Sainsbury’s
      Product Law Guide (HP001)                                  https://www.inspire-js.com
      Supplier Technical Manual (HP002)                          https://www.inspire-js.com
      The Technical Guideline for Own Brand Packaging (TG026)    https://www.inspire-js.com
      Acceptable temperature details                             http://www2.sainsburys.co.uk/sid
      Design Guidelines TG008a and TG008b                        https://www.inspire-js.com
      Labelling Guidelines                                       https://www.inspire-js.com
      Shelf Ready Packaging Guidelines                           https://www.inspire-js.com
      Produce packaging - Retailers                              http://www.rpa.gov.uk
      Traded Unit Codes (TUC) GS1 documents                      http://www.gs1uk.org
      SSCC Guidelines                                            http://www.gs1uk.org
      Full GS1 specifications                                    http://www.gs1uk.org
      Technical details of order processing (ASN)                http://www2.sainsburys.co.uk/sid/info_dep_asn.htm
      ASN Technical Manual                                       http://www2.sainsburys.co.uk/sid
      Withdrawing product. Incident process                      https://www.inspire-js.com
      Information on depot addresses                             http://www2.sainsburys.co.uk/sid
      Conflicts of interest
      (confidential reporting service, called RightLine)
                                                                 http://www.riskavert.co.uk/rightline

      Any SKU agreement                                          As referred to in section 5.9 of the Handbook
      Any promotional agreement                                  As referred to in section 5.9 of the Handbook
      Any BDI/deferred bonus agreement                           As referred to in section 5.9 of the Handbook
      Any fixed deal agreement                                   As referred to in section 5.9 of the Handbook
      Any derogation request, if agreed by us in writing         As referred to in section 5.9 of the Handbook
      Any cost agreement                                         As referred to in section 5.9 of the Handbook
      Any business plan, if agreed by us in writing              As referred to in section 5.9 of the Handbook




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     Appendix 14 – Main Trading Terms

     1 Status
     In addition to the terms set out in the following points, our terms can also be found in the Supplier
     Handbook and Conducting Business with Sainsbury’s (and in any documents to which they refer) and
     are collectively referred to as our Trading Terms (the Terms).

     These are the only Terms under which we will buy goods. No other Terms apply (except those implied by
     law) and no variation of these Terms will be valid unless specifically agreed to by us in writing.

     Our Terms also incorporate and comply with the Groceries Supply Code of Practice (the Code). In the
     unlikely event that any part of our Terms is inconsistent with the Code, the Code shall prevail.

     If any part of the Terms is inconsistent with any other part, they shall apply in the following order of
     priority: (a) the Terms as set out in the following points; (b) our Supplier Handbook; (c) the documents
     listed in the appendices of our Supplier Handbook; and (d) Conducting Business with Sainsbury’s.

     For the avoidance of doubt, “we”, “us” or “our” in the Terms refers to Sainsbury’s Supermarkets Limited.

     2 Supplying goods
     Time shall be of the essence in relation to the supply of your goods under the Terms. You will not be liable
     for any delay or failure to supply goods arising from an act of God, war, flood, civil commotion, embargo,
     act of state or an industrial dispute which does not solely affect your business, as long as you tell us
     promptly about the circumstances and, if required by us, you shall supply the goods under the same terms
     when the circumstances have passed. If such circumstances impose a delay in the supply of goods of more
     than 2 weeks, we may cancel the affected order without liability.

     3 Delivery and acceptance
     You must deliver goods to us that we order. Delivery of goods must be strictly in line with our order and
     the Terms to the address we give you. We or our authorised agent do not have to accept any incomplete
     delivery, any goods above the amount ordered or any goods delivered to an address other than the
     address stated by us. Notwithstanding acceptance, we or our authorised agent may reject orders if we find
     faulty goods or goods not in line with the order, the Terms or the agreed specification, including goods
     incorrectly packaged, labelled or barcoded. You must collect rejected goods promptly after we or our
     authorised agent rejects them. We or our authorised agent may reject or withdraw faulty goods not in line
     with the order, the Terms or the agreed specification, or ask for them to be replaced or repaired. You will
     refund all our costs associated with rejecting or withdrawing product, and our reasonable storage or
     handling costs as a result of a delivery being rejected by us. We will be entitled to destroy rejected goods
     that are not collected. Any goods we reject or do not receive which have our name or mark on them must
     not be supplied to any other person while they identify us.

     4 Title and risk
     Title (being full title guarantee, free from all or any encumbrances and third-party rights) and risk in the
     goods will pass to us or our agent, when the goods are delivered. If we or our agent reject the goods,
     property and risk shall immediately pass back to you.

     5 Intellectual property rights
     Copyright, design rights and all other intellectual property rights in all work, including but not limited to
     product development (including, for example, brief, specification or formulation), packaging or promotional
     material, owned by us or made for or commissioned by us in connection with providing goods or services,
     will vest in and belong to us. If we ask, you must assign or procure the assignment of such intellectual
     property rights to us with full title guarantee (free from any encumbrances and third-party rights). You will


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     waive or agree to procure the waiver of any moral rights subsisting in such works to us. Any trademarks
     and goodwill relating to goods made for or commissioned by us will vest in and belong to us and must
     only be used in the way authorised by us. If we ask, you must assign or procure the assignment of such
     trademarks and goodwill to us with full title guarantee (free from any encumbrances and third-party rights).

     Under no circumstances should such work be supplied to anyone other than one of our authorised
     employees. You acknowledge that damages alone may not be an adequate remedy for breach of the
     Terms or infringement of our intellectual property rights. Accordingly, without prejudice to any other rights
     and remedies we may have, we reserve the right to seek injunctive relief concerning any threatened or
     actual breach of contract or infringement of intellectual property rights and to claim damages or an
     account of profits together with our legal costs in respect of any infringement of intellectual property
     rights. You also acknowledge that if you knowingly commit any unauthorised act in relation to our
     intellectual property rights, this may in certain circumstances constitute a criminal offence by you, your
     directors or other officers.

     6 Warranty
     You warrant that goods that you supply to us will be fit for purpose and will meet the terms of our order,
     the Terms (including but not limited to the specification) and all legal and safety standards that apply to the
     goods, their resale or use.

     You warrant to us that you are entitled to sell, unencumbered, the goods to us, with full title guarantee and
     without any third-party interest, for on-sale by us.

     7 Indemnity
     You will indemnify, keep us indemnified and hold us harmless against any loss or expense arising from you
     breaking the Terms, including but not limited to, your failure to pass good title (in accordance with point 4
     above) onto us on delivery of the goods, or any term implied by law.

     You will indemnify, keep indemnified and hold us harmless if we incur any liability; incur any costs in
     defence of any claim; or incur any costs as a result of any intellectual property infringement or alleged
     infringement, on the sale of any goods supplied by you pursuant to these Terms.

     You will not be liable for loss arising from or following our instructions in relation to labelling our
     own-brand goods.

     8 Payment terms
     You may invoice us for the goods delivered following our acceptance of your delivery of the goods at the
     price as amended by agreement between us from time to time.

     We will pay for the goods no later than the last business day of the month, following the month of invoice,
     with cleared funds being in your bank account no later than 3 business days of this date (the “Due Date”).
     All prices, rates and charges will exclude VAT.

     Should we fail to make payment (due under the contract) in full by the Due Date, you may at your sole
     discretion charge interest at the rate of 1 per cent above the base rate of the Bank of England from time to
     time calculated from the Due Date to the date of payment, whether before or after any judgment.

     You agree with us that the rate of interest set out above is the rate applicable to these Terms in substitution
     for the statutory rate of interest calculated in accordance with the provisions of the Late Payment of
     Commercial Debts (Interest) Act 1999.

     If you owe us any money, we may take the amount you owe us off any amount due to you, now or in the future.


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     9 Confidentiality
     For the purposes of the Terms, Confidential Information includes but is not limited to any and all
     information that is not in the public domain relating to the Sainsbury’s business, our trading relationship
     and/or the basis upon which we sell your goods and services, such as: pricing information (including our
     purchase price from you and/or our future intentions for retail selling price); discounts; profit margins
     and/or details of any future and/or planned promotion.

     You must keep confidential any and all of our Confidential Information that comes into your possession.
     In particular, you must not disclose any of our Confidential Information to any competitor of ours or
     any competitor of yours. You shall also not discuss with anyone else our retail prices (including current
     retail prices).

     You must not tell anyone about your business connection or your terms of business with us without our
     permission, except as required by law.

     10 Termination
     The Terms may be terminated on written notice given by us, without prejudice to any other rights we may
     have, in the following situations:

     a immediately if you are in breach (which shall include but not be limited to the failure to deliver the goods
     in accordance with our specification and/or order and/or a failure to comply with all legislation relevant to
     the manufacture and provision of the goods) of the Terms, or within 14 days of being asked in writing to
     remedy such breach, if the breach is capable of remedy

     b immediately should you suffer a change in Control (as that term is defined in the Income and Corporation
     Taxes Act 1988)

     c immediately if you are subject to an Insolvency Event. For the purposes of the Terms, Insolvency Event
     shall mean that you have ceased to trade or have had a receiver, administrative receiver, administrator or
     manager appointed over the whole or any part of your assets or undertaking, or you have become
     insolvent or gone into liquidation (unless such liquidation is for the purposes of a solvent reconstruction or
     amalgamation), compounded with your creditors generally or you have been otherwise unable to meet
     your debts as they fall due or you have suffered any similar action in consequence of debt or where we
     reasonably believe that any of the events mentioned in this paragraph is about to occur in relation to you

     d the Terms may be terminated by either one of us at any time by giving to the other reasonable notice
     of termination.

     Prior to termination for cause under (a) or on notice under (d) you may request (in writing) that the
     decision be reviewed by a Senior Buyer at Sainsbury’s. You may also request (in writing) an interview with
     our Code Compliance Officer to discuss our decision in this respect.

     11 Disputes
     a If a dispute arises between us in relation to any matter, including an alleged breach of the Code or the
     Groceries (Supply Chain Practices) Market Investigation Order 2009 (“the Order”), then we will negotiate
     in good faith with you to resolve the matter via our internal escalation procedures.

     b If you believe that we have not fulfilled our obligations under the Code (“Code Dispute”), you may contact
     our Code Compliance Officer, who will inform you of your right to initiate a dispute resolution procedure
     under Article 11 of the Order (a “Code Dispute Resolution Procedure”). We may also notify you that we wish
     to initiate a Code Dispute Resolution Procedure.




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     c If any Code Dispute is not resolved by the parties to our mutual satisfaction within 21 days from the date
     that the Code Dispute Resolution Procedure is initiated pursuant to point 11(b) above, then at any time
     during the period expiring 4 calendar months after the dispute arises either party will submit to an
     arbitration request made by the other in writing.

     d Arbitration proceedings initiated in connection with a Code Dispute Resolution Procedure under point
     11(c) above, will be administered by the Groceries Ombudsman, if established. If the Groceries Ombudsman
     is not established, or has a conflict of interest in relation to a particular dispute, the arbitration will be
     administered by a single arbitrator appointed in accordance with the Rule of the Chartered Institute of
     Arbitrators in force for the time being. To the extent that they do not conflict with this point 11(d), the
     arbitration will be conducted in accordance with the Rules of the Chartered Institute of Arbitrators in force
     for the time being, or such other dispute resolution body as is nominated by the arbitrator. The number of
     arbitrators will be one and the seat or legal place of arbitration will be London, England, or such other city
     within the United Kingdom as you nominate. All costs of the arbitrator will be borne by us, unless the
     arbitrator decides that your claim was vexatious or wholly without merit, in which case costs will be assigned
     at the arbitrator’s discretion. All other costs of the arbitration will be assigned at the arbitrator’s discretion.

     e If the dispute between us is unrelated to the Code or the Order, either party may notify the other in writing
     (and you must notify your Buyer contact and obtain written confirmation of receipt from us) that it wishes to
     initiate the dispute resolution procedure contained in this point 11(e). If the dispute is not resolved by the parties
     to our mutual satisfaction within 21 days from the date that notification is received, then at any time during
     the period 4 calendar months after the dispute arises, either party will submit to an arbitration request made
     by the other in writing. Arbitration proceedings initiated in connection with this point 11(e) will be administered
     by a single arbitrator appointed in accordance with the Rules of the Chartered Institute of Arbitrators in force
     for the time being. The arbitration will be conducted in accordance with the Rules of the Chartered Institute of
     Arbitrators in force for the time being, or such other dispute resolution body as is nominated by the arbitrator.
     The number of arbitrators will be one and the seat or legal place of arbitration will be London, England.

     f The decision of the arbitrator in proceedings initiated under either points 11(c) or 11(e) above will be binding
     and final on each of us, with the exception that either of us may appeal on the grounds set out in sections
     67 to 69 inclusive of the Arbitration Act 1996.

     12 General
     a Without our prior written consent, such consent to be exercised entirely at our discretion, you must not
     assign, transfer, deal or otherwise dispose of the whole or any part of the Terms or any of your rights or
     obligations in connection therewith.

     b The Terms may be assigned or novated by us, in whole or in part, at any time and on more than one
     occasion to any member of the Sainsbury’s group or any successor of the Sainsbury’s group’s business.

     c If you break a Term and we do not take action against you, this does not mean we will not take action for
     any future incidents where a Term is broken.

     d J Sainsbury plc shall have the right to enforce the Terms. No other person who is not a party to the Terms
     has a right under the Contracts (Rights of Third Parties) Act 1999 to enforce any provisions of the Terms.

     e If any of these Terms is held by any competent authority to be invalid or unenforceable in whole or in part,
     the validity of the other Terms and the remainder of the Terms in question shall not be affected thereby.

     f The Terms and any order placed under them will be governed by English law. Subject only to point 11,
     each party irrevocably submits to the exclusive jurisdiction of the English courts.

     g The effect of points 5, 7, 9, 11 and 12 shall survive any termination of all or part of our Terms in Appendix 14.

79