zdeněk juračka president, czech confederation of commerce & tourism

Conference on Quality Policy for Agricultural Products and Foodstuffs l Prague 12.-13. 3 . 2009

Conference on the Future of the Quality Policy ofConference on the Future of the Quality Policy ofAgricultural Products and FoodstuffsAgricultural Products and Foodstuffs (QPC) (QPC)

Prague, 12-13 March 2009

CZECH PRESIDENCYHigh-level conference


Zdeněk JuračkaZdeněk JuračkaPresident, Czech Confederation of Commerce & TourismPresident, Czech Confederation of Commerce & Tourism

Chairman, Czech & Moravian Union of Consumer CooperativesChairman, Czech & Moravian Union of Consumer Cooperatives

CoConference nference on the Future of the Quality Policy ofon the Future of the Quality Policy ofAgricultural Products and FoodstuffsAgricultural Products and Foodstuffs (QPC) (QPC)

Prague, 12-13 March 2009


Workshop AWorkshop A

3

Demands on doing business and retail standards

Sub-topic: Retail standardsSub-topic: Retail standards

Basic issues Definition of quality Quality and its development in the CR Quality of food retail chains

– retailer’s point of view– manufacturer’s point of view

Relationship between quality and price


4

Definition of qualityDefinition of quality


Food quality evaluation as set by a standardFood quality evaluation as set by a standard

By quality we mean a set of measurable functional criteria for a product.

For many foodstuffs such as drinks or meat products the quality is set by a standard.– Quality evaluation of products manufactured

according to a standard is based on the assumption that it meets at least the basic criteria, i.e. that it achieves standard quality.

– If a product surpasses the criteria set by the standard, it achieves superior quality.

– If the parameters of a product do not correspond to the standard, it can be said to be of inferior quality.

5


Foodstuffs difficult to evaluate for qualityFoodstuffs difficult to evaluate for quality

For products where it is difficult to establish objective quality criteria, an EU quality policy is welcome that sets as its goal support for diversity of agricultural production, protection of designations against misuse and imitation, and helping consumers to understand the special nature of products, particularly through protection of geographical indications and designations of origin. – In this regard labelling information has particular

importance for consumers, including added brochures containing not only the ingredients and production method but also information on its exceptionality and protection within the EU.

6


7

Quality and its development in CRQuality and its development in CR


Czech retail afterCzech retail after 1989 1989

Euphoria from the sudden “full shelves” of shops. Consumer then starts calling for lower prices; does not

pay much attention to quality of goods. Manufacturers and retailers adapt.

Later, influenced by increasing standards of living and being better informed about what is healthy and also good, consumers take a greater interest in goods with better functional parameters.

The behaviour of consumers was also positively affected by legislation, which gradually tightened requirements for production, packaging, labelling, transport, storage and sale of food products, particularly in connection with the accession of the CR to the EU.

8


9


Influence of price on selection of grocery storeInfluence of price on selection of grocery store

10

2000 2002 2004 2006 2008

source: Shopping Monitor 2009 (INCOMA Research)

I choose where I shop based primarily on price


11

Quality from retailer’s point of viewQuality from retailer’s point of view


Czech shopsCzech shops

12

…as most of today’s population will never know them


National Quality Policy and retailNational Quality Policy and retail

The National Quality Policy affects the field of retail primarily in these areas: support for business

– support for certification of systems– projects for promoting quality– the Czech National Quality Award programme– the Czech Quality programme

consumer protection– legislation, laws– information for the public (information centre, quality month, conferences and seminars, media support)

13


Role Role of the of the SOCR SOCR in the field of qualityin the field of quality

14

Quality satisfaction of consumer needs, aimed at the prosperity of businesspeople in retail as well as the tourism and food service industry.

Harmonisation of the conditions for doing business in commerce and tourism in the CR and EU, and of the conditions for protecting consumer interests according to EU standards (while avoiding excessive restriction).

Support for all regular forms and goals of doing business in commerce and tourism with a view to the coexistence of small and medium enterprises with large multi-national corporations.


Food safety in Czech shopsFood safety in Czech shops

regular food retailers in the CR meet the strictest hygienic standards in the EU

transition to European standards following accession of CR to EU without conflict (Czechoslovakia was already the showcase of Europe during the First Republic)

ensuring the quality and safety of foodstuffs is a priority task for the SOCR, which – is a member of the Ministry of Agriculture’s coordination

group for food safety,– organises regular round tables with representatives of

supervisory bodies,– helps create and publish the HACCP guides for retail

and tourism.15


Is quality the key to success for a retailerIs quality the key to success for a retailer??

16

The retailer knows their end consumer best and adapts to their wishes and expectations.

The retailer helps create and influence quality, and offers it to the customer; has an interest in informing the customer about the products they are selling (supports choice of quality) and defends the consumer’s interests.

Customer perceives quality; influences it by their conduct Retailer can primarily find out about low-quality products

after the fact, on the basis of customer complaints, and can then not order those products.

Disfavour among customers more effective than fines.

ConclusionConclusion: : Yes, quality is the key to retail successYes, quality is the key to retail success!!


17

Quality from manufacturer’s point of viewQuality from manufacturer’s point of view


Quality from the point of view of primary Quality from the point of view of primary agricultural productionagricultural production

relatively low number of large agricultural farms– large and homogenous batches– clear supervision

qualified labour force superior standards well organised system of checks

a basic condition for safety and quality is complex information about the product and being able to trace it back to the manufacturer.

Czech agriculture and the Czech processing industry is able to guarantee high food quality and safety without problems.

18


Quality from the point of view of the Quality from the point of view of the manufacturermanufacturer

Do retailers understand quality the same way we do? Why does a poor quality product receive a lower price

and more space in flyers than a high quality product? From the point of view of the manufacturer high quality

products should have the same space set aside in shops as for example organic food.

Discount supermarkets undercut quality and price on the market.

19


20

Relationship between quality & priceRelationship between quality & price


Can cheap food products be qualityCan cheap food products be quality??

A cheap product can be quality, but it is practically out of the question that it will provide superior quality.

Tests from renowned laboratories as well as our own experiences show however that more expensive products need not necessarily be of better quality, taste better, or be healthier.

If the relation between a product’s quality and price is maintained, the product will always find its consumers.

21


Is food labelling a part of qualityIs food labelling a part of quality??

It is very difficult for consumers to assess all the data given on a product. The dimensions of some products do not allow them to hold all the necessary information.

According to the European Food Information Council only 18 % of Europeans read ingredient information.

Careful monitoring of what foodstuffs are made from would however wake many customers up from their lethargy, according to Ivana Picková from the Consumers Defence Association.– see for example the recent findings of the consumers’

association TEST that children’s cereals are not the healthy breakfast they claim to be due to high sugar content.

22

source: Týden 9/2009


Traffic light labelling supports retailTraffic light labelling supports retail

23

graphic: Food Standards Agency (Traffic light labelling )


ConclusionConclusion

How will the world’s ongoing economic problems affect interest in higher quality but more expensive products?

If a customer becomes convinced about the quality of a project it will be hard to give it up.

24


From From Retail Summit 2009Retail Summit 2009

On the issue of the quality of products in retail networks the conference stated an interest in: renewing negotiations with the Ministry of Agriculture on reviving the KLASA project, initiating cooperation with supervisory bodies leading to adhering to the declared product parameters and quality control.

The key interest of Czech commerce is to put quality ahead of other attributes.

25


26

Thank you for your attentionThank you for your attention

zdeněk juračka president, czech confederation of commerce & tourism

Documents