22 August 2002 | David Arminas
National Lottery operator Camelot has introduced a policy of limiting its business with any supplier to 20 per cent of the supplier's turnover.
The company's Social and Ethical Report 2002 sets out the policy under the "economic impact" heading of its section on suppliers.
A spokeswoman for Camelot said that treating suppliers in a more open and socially responsible way was becoming increasingly more important for the company.
She told SM: "Social responsibility is now much more a part of our package to win the lottery contract. Camelot exists for only one reason: to run the National Lottery.
"If we don't win the next bid in 2009, we will all go our separate ways and the suppliers lose all our business.
"We are stepping up our supplier forums to explain the policy and communication is now a lot more two-way than before," she added.
Camelot was put together by five shareholders, including Consignia, Cadbury Schweppes and Fujitsu Services, to bid for the first contract to run the lottery in 1994.
Last year Camelot beat Richard Branson's People's Lottery Group to retain the contract until 2009.
Michael Littlechild, chief executive of the ethical business consultancy GoodCorporation, said having a social policy clearly stating limits on supplier business was not common, but could help to create a more resilient supply chain.
"It is not a policy that we see in social reports very often," he said. "For the client it's about risk management and the policy may have been implied before but not written down."
With suppliers not reliant on any one client, they will have to work with many clients and so the policy has encouraged competition to assure a health supply chain."
He added that SMEs could fall into the trap of relying too heavily on one client.
Simon Marsden, purchasing manager at the CHE Group, which operates Choice Hotels Europe, believed a percentage policy had to be flexible.
"It's a good policy but it must be flexible," he said. "Circumstances can change where the business becomes much more than 20 per cent if the supplier loses other clients."