Rewe Group Strengthens the Finances of its Suppliers

, 27.04.05

Contract suppliers receive relief in settling trade transactions

Starting on May 1, 2005, Rewe-Zentralfinanz eG (RZF) is to improve its finance and insurance management with WKV 100, its unique programme of trade credit insurance, and to provide relief to its contract suppliers in settling goods transactions. According to Rewe, WKV 100 offers suppliers the benefit of making additional traditional credit insurance unnecessary, which often only covers 60 to 70 per cent of bad debts, by providing 100 per cent coverage. In addition to the existing central processing with del credere guarantees from RZF, the outstanding debts against Rewe are insured externally without deductible for the supplier. To do this, the RZF subsidiary Rewe Finanz-Kontor GmbH (RFK) has obtained trade credit insurance developed in co-operation with well-known insurers and banks and the leading global insurance broker Aon.

In contrast to traditional trade credit insurance, this new type of trade credit insurance from Rewe has no credit limits for suppliers -- all deliveries from the supplier billed through RZF are covered instead. Aside from lacking a deductible, WKV 100 also sets no upper limits for payments on claims. The supplier also saves money on additional costs normally associated with creditworthiness ratings prior to taking out trade credit insurances. The service also handles fulfilment of other obligations by the supplier, including enforcing reservation of ownership or obtaining accounting information, which so far has been difficult for suppliers to realise.

After introducing the WKV 100 trade credit insurance, Rewe also plans to expand a special factoring offer for its suppliers. With "Factoring 100", Rewe suppliers will be able to finance their accounts receivable against Rewe in advance at preferential conditions (factoring). The option of paying outstanding supplier receivables will improve liquidity among suppliers and, as with WKV 100, strengthen the finances of Rewe Group suppliers.

"This new type of trade credit insurance offers our suppliers an excellent opportunity to optimise their own refinancing conditions. We are confident we will be able to offer a good service package and hope for very broad support on the part of our suppliers," Rewe CFO Gerd Bruse said in summarising the aims of this new service for suppliers.

With a turnover of 40.8 billion euros, Rewe Trading Group is the number three in European food retailing and wholesaling. Over the past fiscal year, the group's 11,665 stores and 196,000 employees in 14 European countries increased turnover by 4.1 per cent. WKV 100 represents another cornerstone for the continued successful long-term expansion of the company and its ongoing co-operation with suppliers in the spirit of partnership.

Contact

REWE GROUP-Corporate Communications
Tel.: 0221 - 149-1050
E-Mail: presse(at)rewe-group.com

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