Potential for Supplier Assurance in the Asian Market

Chiyuki UeharaAeon Co., Ltd.

August 26, 2010

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Outline of Aeon Group

Operating results (Fiscal year ended February 2009)

Total revenues \5,230 billion 　 Operating profit \ 124 billion

Number of companies 182 (As of February, 2009)

Number of stores per formats

GMS (General Merchandising Stores) 601

Discount stores 158

Super Markets 1,231

Convenience stores 3,720

Specialty stores 4,748

Other operations 2,148

Total 12,156 stores

６０１店舗

１５８店舗

１，２３１店舗

３ , ２７０店舗

４，７４８店舗

２，１４８店舗

Expanding Aeon’s operation in 8 countries in Asia

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Aeon’s private brand products has been expanded to 5,000 items including clothing, food and housing and sold at 8,000 stores.

Expansion of private brand products

050

100150200250

300350400

450500

Annual sales of private brand

(Unit=Billion Yen)

Private brand products

4

Global standard

Aeon standard

Food Safety Management Systems

Good Practices (GAP,GMP,GDP)

Hazard Analysis and Critical Control Point (HACCP) principles

Corporate philosophy

Brand concept

Quality and CoC requirements

Use of private standard

Adoption of GFSI standard

Implementation of GFSI benchmarked standard

Agricultural field

GAP　

GMP

TransportationTransportation

We are responsible for quality control on total supply chain and provision of product information for customer.

We ask our suppliers compliance with Aeon’s code of conduct which includes requirements on environmental and ethical issues.

Factory Store

Ensuring food safety system by global standard implementation

GDP

Food safety management system 　

GAP implementation activities in Japan

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• Existence of various GAP impose various procedures on producers

• There are needs for high level

GAP based on scientific knowledge and on demands of consumers and retailers.

• Target ： 2,000 producer’s 　　 groups （ by 2011 ）

• Existence of various GAP impose various procedures on producers

• There are needs for high level

GAP based on scientific knowledge and on demands of consumers and retailers.

• Target ： 2,000 producer’s 　　 groups （ by 2011 ）

• Ministry of Agriculture held the committee and made GAP Guideline for food safety, sustainability, and workers’ safety.

• Leaders’ training is on going for GAP introduction into producer’s groups.

• Ministry of Agriculture is trying to get consumers’ confidence by implementing upgraded GAP .

• Ministry of Agriculture held the committee and made GAP Guideline for food safety, sustainability, and workers’ safety.

• Leaders’ training is on going for GAP introduction into producer’s groups.

• Ministry of Agriculture is trying to get consumers’ confidence by implementing upgraded GAP .

GAP Guideline was published by Ministry of Agriculture in April 2010.

Outline of GAP activities in Japan(1)

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Number of producer’s groups that have

introduced ＧＡＰ

Jul. 2007

Dec. 2007

Jul. 2008

Mar. 2009

• Many small size farmers

• Cooperative produce handling

• Certification cost & education system for covering a various number of farmers

Feature of Agriculture in Japan

Problems on acquisition of certification

Outline of GAP activities in Japan(2)

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Promotion of GFSI benchmarked GAP

Field study Interpretation meeting Sharing information

Key issues for promotion activities:• Ensuring feasibility for Japanese farmers - Consideration of Japanese agriculture situation (ex. Many small size farmers)

• Practical level understanding through interpretation by various stakeholders including farmers, retailers, CBs, consultants and other experts.

GMP&FSMS implementation activities

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GFSI Global Market TC pilot project (1)

In globalized food supply chain, procurement from less developed businesses and small suppliers has been increased. The level needs to be raised for offering safe food.

　The following issues are important for upgrading the level. 1. Leaders who introduce the knowledge of food safety in developing countries and at small and medium sized companies needs to be raised.

2. Multiligualized education tool is necessary for food business which hasn’t acquire GFSI benchmarked standard. 　　

Global market TC pilot project has started as a measure of food safety for small suppliers

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GFSI Global Market TC pilot project (2)

multilingualizationlinkage

Basic level

Intermediate level

Certificate

FSKN（ Food Safety Knowledge Network)⇒E-learningRaising the level of control ability on food safety for QC stuff at less developed businesses and small food suppliers.

Global Market⇒Self checklist for audit and evaluation guidelineRaising the level internally by using check list and evaluation guideline at two levels (basic and intermediate level)

Raising the level

+

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Secretariat: 5 stuff members at quality control dept. of Aeon Malaysia - with experience of factory audit or store sanitary control and FSSC 2200 auditor training courses

Target:12 suppliers of private brand products of Aeon Malaysia

Contents ： - Pre- level check test regarding food safety and sanitary control - Face to face FMS training using E-learning system of FSKN 　　 - HACCP training by external experts - Instruction including post-evaluation from Quality control dept. at Aeon

　　

Pilot project by Aeon Malaysia (1)

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Pilot project by Aeon Malaysia (2)

Participant Feedback:- Appreciation for having the training to Aeon Malaysia- Request more seat availability for next HACCP training- Interests in this program and intention for effective use of this program- Expectation for the audit

12-May 27-Jul HACCP

1 Degree QC 88 88 762 Degree QC 84 90 763 B Degree Ow ner 100 92 844 C Degree Ow ner 56 64 525 D Secondary Ow ner - - Absent6 Degree Marketing 56 - 607 Degree Marketing 24 - Absent8 Degree Ow ner 28 56 369 Secondary Asst.Fac Mgr 32 - Absent

10 Secondary Production/QC 40 64 4811 Secondary Store Keeper 32 72 2812 H Diploma Production/QC 84 - Absent

Business

A

FManufacturer of sushi

E

Company's NamenoEducation

levelposition

test

ingredient

GManufacturer fortamoginiyaki

Frozen Pizza

Cookies

Tofu

Cordial drink

Brow nies and CakesPackaging of nuts

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•Support for small suppliers

( Education and tool)

• Effective certification system

(Cost effectiveness and time efficiency)

• Placement of contact person adjusting local issues

for global harmonization

For further implementation of supplier assurance

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Thank you!