Magnit ships record 305,000 tonnes of russian produce to its stores agricultural contracts

Krasnodar, Russia (January 24, 2022): In 2021, the Company increased deliveries of Russian fruits and vegetables under agricultural contracts by 21% compared to 2020. The share of these goods (which are also sold under the Magnit Freshness brand) in Magnit’s sales in key categories reached around 30%, with domestic beets, cabbages, potatoes, and carrots (so-called “borscht vegetables”) in the lead.

Today, Magnit has long-term contracts with 65 Russian producers, having signed on 17 new suppliers in 2021. The Company has been running the project since more than five years. Magnit signs contracts with farms for future crop deliveries, which allows farmers to have a reliable partner and be confident that they will be able to sell their produce. In turn, the Company can purchase fruits and vegetables directly without intermediaries and control the entire production chain, from crop rotation to shipment, which enables it to offer its customers high-quality products at affordable prices. Magnit’s production partners are spread across a number of different territories, from the republics of the North Caucasus to the subjects of the Ural and Siberian Federal Districts (Tyumen, Kurgan, Novosibirsk regions, and others). Suppliers, including small and medium-sized businesses, grow more than 50 types of products for Magnit — in addition to the borscht vegetables, they produce pumpkins, turnips, celery, as well as apples and melons.

The quality of goods is controlled at all production stages by the Company and manufacturers together — Magnit’s agronomists regularly visit growing facilities at different stages of production, from preparation for sowing to harvesting and placement of products in storage. The Company also employs surveyors to perform quality checks at the partners’ sites (for insurance purposes), which reduces the likelihood of low-quality goods appearing on the shelves of Magnit stores to zero.

Ivan Lubyansky, Director of Department of Management of Agro-Industrial Enterprises of Magnit:

“Fruits and vegetables are a key category for our customers, so we focus on creating the best offer on the market. Through close cooperation with producers, we develop and improve the assortment, minimize the impact of external factors on availability of key fruits and vegetables for our customers, and participate in import substitution. In 2022, we will continue to actively develop this area.”

Magnit is currently implementing a range of projects to support Russian farmers. In addition to agricultural contracting, in 2021, the Company joined forces with the Russian Agricultural Bank to launch a project to promote farm products in Magnit stores. The Company also has developed a simplified contract form for small agricultural producers, holds regular procurement sessions in different regions for local suppliers, and is working on a number of other activities.

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