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Asda's IPL arm sources 40% of its wine

Published:  06 November, 2012

Asda has revealed its direct sourcing arm IPL is responsible for buying up to 40% of its wine range.

The subsidiary firm - which cuts out the middleman by sourcing direct - is also helping the supermarket develop new partnerships with smaller, boutique companies at source.

"The IPL model is invaluable - enabling us to meet some quite niche suppliers that maybe we wouldn't have come across," said BWS category director Tracy Ford.

"It allows us to develop much better strategic and long-term relationships with primary producers."

Through IPL the supermarket has listed a wine from Romania for the first time in its autumn/winter range. Recas Wine Bradshaw Pinot Grigio 2012 is from the IG Ville Timisului region and retails for £5.98.

Spain is another country Asda identified as a sourcing focus for IPL going forward, especially the emerging regions of Priorat, Rueda and Extremadura.

Using IPL enables Asda to save 10% of costs, compared using agency importers, it is estimated.

For Ford, the sourcing arm gives Asda "more expertise in the wine team", and ultimately means it can pass on better prices to its customers.

The direct-sourcing model also benefits producers by forging a "direct relationship with us", Ford said, "giving them the opportunity to invest in people within the plant and infrastructure".

Ford told Harpers that sourcing through IPL will be "a significant part of what we
do" going forward.

As part of Asda's drive to source wine at the best possible prices, the supermarket has also signed a three-year deal with Snetterton-based bottling plant Vinpack, in Norfolk, which will exclusively pack wines for the supermarket and not supply to any other third-party customer.

By shipping liquids in bulk and bottling on site, Vinpack "cuts out costs associated with the supply chain", Ford said. It also creates "carbon savings", she said.

"We'll either pass on [savings] to the consumer or the producer," she added. "It works for the producer because the better value we sell the wine at, the more wines we sell."