'Buy locally' policies are not tempting majority of buyers

27 March 2009

27 March 2009

Many purchasers are holding their ground amid talk of rising trade barriers and protectionism, the latest SM100 poll suggests.

When asked if their organisation was buying more goods and services from its domestic market, 73 per cent of respondents answered "no".

Of the 27 per cent that had upped domestic sourcing, many cited the weak sterling as a factor - not the desire to stimulate local businesses or create jobs.

"The same, low margin products we purchased from France last year are now around 32 per cent dearer," said Steve Taylor, a purchaser at UK-based ornamental fish importer JMC Aquatics.

Cutting carbon emissions was another factor for those buying more from their domestic market, as was a desire to shorten supply chains to reduce risk.

Last month the World Bank issued a report that found major economies had raised protectionist trade barriers despite their collective pledge to refrain from such actions in the face of the global recession.

British Prime Minister Gordon Brown is trying to cut protectionist measures and wants leaders at this month's G20 summit in London to agree to a trade arrangement that encourages countries to support their neighbours, in a bid to try to pull the global economy out of the recession.

Cambridgeshire County Council senior procurement manager Ian Stewart told SM the council was not upping its spend in its domestic market and said public sector buyers must treat all suppliers equally.

"A lot of discussion about only using 'local suppliers' would be self defeating," he said.

"If we only used Cambridgeshire suppliers and abutting counties did the same it would close off those other markets to Cambridgeshire companies."

Consultant Alex Strange said the argument to purchase locally to ensure employment was logical and protectionist but smart procurement decisions came down to price.

"Product cost during a recession is of prime importance and if organisations stop buying from the overall best-costing source, they stand a good chance of being bankrupted."

Meanwhile, the elected mayor of North Tyneside John Harrison has reportedly set a target for the council to spend 10 per cent of its procurement budget locally.

The move - in Harrison's "Budget for jobs" - would mean £5 million a year put into the local economy.


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