After 20 years, Spanish grocer Mercadona has ended its preferred supplier agreements with 120 producers in favour of a new equal relationship with all its 1,400 suppliers. Going forward, no single supplier will command exclusivity over a specific product category production.

The decision marks the end of the “interproveedor” or ‘integrated supplier’ system first implemented two decades ago that saw companies awarded long-term contract to develop all or some of a category and which allowed for three-year disengagement terms in the event of a contract break.

The new system sees all suppliers able to work product to product. If Mercadona wants to introduce new products, all relevant suppliers will be able to bid to supply it, as long as it can satisfy the retailer’s quality and price standards.

Source: Expansion