Krasnodar, June 03, 2021: Magnit Retail Chain has developed a simplified standard supply contract for small farmers that find it difficult to meet all the requirements of the Chain to medium-sized and large suppliers. This simplified contract will allow farmers to expand their presence on shelves of the largest Russian retailer.

Magnit has formulated its criteria to partners – small businesses that will be offered this simplified contract form. Such requirements include an annual income of no more than 150 million rubles a year, as well as production and processing of certain types of agricultural products: milk, meat, eggs, fish. It is planned that the list of these categories will be expanded.

The simplified contract contains reduced requirements as to the level of fulfillment of obligations under such contracts. Besides, it provides for a shorter payment period for goods supplies than those set for large partners, as well as other reliefs. At the same time, Magnit will strictly monitor compliance with contractual obligations by counterparties to ensure availability and high quality of farm products on its shelves.

“The customer loves farm products, which means we need to ensure presence of these products on our shelves. The simplified supply contract is an important step in that direction. We need farmers across the country that grow berries, fruits, vegetables, produce dairy and meat products, so that we could offer the freshest products to our customers. We are ready to cooperate with small farms, start first shipments with 500-1,000 kg in order to work out the supply process. We believe in Russian farmers and are ready to create simplified conditions for them to enter the Retail Chain”, – said President, CEO of Magnit Retail Chain Jan Dunning.

The simplified supply contract is a continuation of Magnit's active cooperation with agricultural producers and small businesses. The Company has launched the Farmer's Yard project under which the retailer displays farm products on its shelves, as well as the Farmer's Shop project under which Magnit leases spaces to local producers in its stores for them to sell their farm products to customers independently. In 2021, the Company launched the training program for peasant farms.

Earlier, Magnit was the first Russian retailer to introduce a digital form of contracts with suppliers. As a result, today reconciliation of documents takes 2 minutes instead of 40, registration of contracts in the accounting system is automatic, and exchange of documents is performed online. In addition, in February the Company simplified its supply contract for all food suppliers. All the wordings there have been simplified as much as possible, the contract structure has been elaborated, and complicated texts have been excluded, with all the Company's business processes preserved.

Magnit Retail Chain cooperates with more than 5 thousand partners, about half of which are regional. The share of local suppliers in the assortment of staple foods, for example, in the category of dairy products is 71%, in bakery products – up to 90%. During the years of cooperation with Magnit, many local producers could reach the federal level, increase their turnovers and their production by many times.

Magnit to launch a simplified contract form for farmers