Split procurements may encourage more companies to deliver food

Press release

It is still difficult to get tenders from small and medium-sized suppliers when municipalities, county councils and the state buys food and meal services. This is despite the fact that the market is worth SEK 10 billion a year. The information comes from a new report by the Swedish Competition Authority.

Many food managers in the public sector would like to purchase from smaller suppliers to avoid being too dependent on the few players that currently dominate the market. However, they are experiencing problems since there are too few small and medium-sized suppliers of food and meal services who submit tenders. This concerns a very large market. The public sector buys food and meal services for SEK 10 billion annually, which pays for three million meals served every day.

"To strengthen competition and to put pressure on suppliers to maintain high quality, we would like to see more players in the market. We are now giving a number of tips to public purchasers that can help them obtain more tenders when they are procuring," says director-general of the Swedish Competition Authority, Dan Sjöblom.

In the Swedish Competition Authority report "Public procurement of food," a number of tips are given to public purchasers of food. Here are a few examples:

  • Split the procurement into smaller contracts based on product groups, for example.
  • Avoid demanding that the supplier also manages distribution. 
  • Reduce and simplify administration for tenderers.

The report contains new statistics and information from food managers in municipalities, county councils and the state. It shows that, among other things, many food managers experience problems with suppliers replacing products and raising prices over those agreed during the contract period. In addition, many procuring authorities feel it is difficult to set requirements that mean they get exactly the food they want. Effective follow-up of the agreement can ensure that the right goods and services are delivered.

The number of tenders per procurement is also small compared to other industries. For the procurement of food, an average of 1.9 tenders are submitted and for the procurement of meal services the figure is 2.2 tenders. For public procurement in general, about 4.5 tenders per contract are submitted.

The wholesale market for food is dominated by two major players, and the market for meal services by three large players.

"Stronger competition on the market would be good for all school children, sick and elderly people who eat the food purchased in the public sector. More players should be given the chance to compete for the SEK 10 billion that municipalities, county councils and the state spend on food. It would contribute to improving quality and cost-effectiveness," says Dan Sjöblom.

For further information, please contact:
Jimmy Dominius, Press Officer, phone +46(0)8-700 15 80 or +46(0)76-542 15 80
Jonathan Lukkarinen, Project Manager, phone +46(0)8-586 21 732

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