On-going Policies

These letters are to provide you, our suppliers, with some of our current practices, procedures, requirements and general specifications with respect to shipment, delivery, billing and allowances.

Warehouse Best Practice Billing Letter (04/27/04)

DSD Best Practice Billing Letter (04/29/04)

NOPA - Product Placement Letter (05/23/03)

Daily Scan Letter (04/18/03)

Safeway's Mandatory Temperature Receiving Requirements HACCP
- Hazard Analysis and Critical Control Point Policy

This information is provided for Safeway's Refrigerated & Frozen suppliers to comply with the Food & Drug Administration, Hazard Analysis and Critical Control Point (HACCP) Policy.

Safeway's Letter to Refrigerated & Frozen Suppliers (6/24/2004)

Safeway's Mandatory Temperature Receiving Requirements (09/10/2007)

Bioterrorism Preparedness Response Act of 2002

While several sections of the Act have been enforced for some time, Safeway is in the process of ensuring compliance with the required federal regulation. This information will provide you with measures Safeway requires of its vendors to ensure compliance with Federal regulations.

Safeway vendor requirements letter Click here

List of Safeway item groups affected Click here

C-O-O-L Country of Origin Labeling Letter(s)

These letters provide to you, our suppliers, the specific steps that must be taken to assist Safeway in complying with the Mandatory Country of Origin Labeling for Seafood laws. We appreciate your assistance and look forward to our continuing relationship.

Mandatory Country of Origin Labeling for Seafood Letter (04/12/04).

Safeway Seafood Vendor Requirements (04/15/04).

Safeway’s Policy on Store "Test"

Suppliers may, on occasion, be permitted by Safeway to conduct marketing tests within our stores. Such testing is subject to the following rules and procedures:

1. The manufacturer’s "Safeway specific" representative must complete a "Request for Category Test" (the "Test Request") and return that form at least sixty days before commencement of the proposed test.
2. If the proposed test meets Safeway’s requirements* and is otherwise acceptable to Safeway, the Test Request will be forwarded to the appropriate Safeway officials for their approval.
3. At any point in this process, Safeway may request modification, including expansion or limitation, of the proposed test, or may condition approval of the proposed test upon such modification.
4. If the proposed test is approved by Safeway, the VP of SCOP will set up the implementation and tracking of the proposed test with supplier’s representative.
5. At the conclusion of the test, a determination will be made by Safeway, in the exercise of its sole discretion, as to the implications of test results for Safeway’s business processes, and whether such results indicate that the product(s) tested represents a business opportunity that Safeway should pursue.

*Company Requirement:
All category tests that are "externally" generated must provide some defined significant value to Safeway or to the categories for which they apply. Safeway Category Optimization Process (SCOP) contact:

Vice President, SCOP Merchandising Systems & Strategies

Carolyn Cozad

(925) 469-7273

Product Recall or Withdrawal

Please review our CCG, Section IX, for our policy regarding Product Recall or Withdrawal.

Effective June 1, 2003, Safeway established a point of contact for vendors to use when it becomes necessary to recall or withdraw a product from the market. To report all recalls or withdrawals, please e-mail or phone the Product Defect hotline:

Phone - (623) 869-5101
E-mail - ProductDefect.US@Safeway.com

Your product action information must include:

1. Type of action -withdrawal or recall with classification
   
   
2. Manufacturer's name
   
   
3. Product name as it appears on the consumer package
   
   
4. Package size
   
   
5. UPC#
   
   
6. Code(s) or date(s) and location on package
   
   
7. Reason for the withdrawal/recall
   
   
8. Where the product was distributed within Safeway companies (if known) .
   
   
9. Action to be taken (there are only three options):
   • Destroy at store level,
   • Hold for vendor pick-up, or
   • Return to Safeway Product Recovery Center to be returned to vendor.

Corporate Reclamation Policy

Safeway's unsaleables policy is derived from the 1990 GMA/FMI document, "Joint Industry Report on Product Reclamation Centers." We endorse the voluntary guidelines contained in the report and have incorporated them as the foundation of our own policy.

Our invoice format and internal policy acknowledges our goals:

To provide products of the highest quality and present a quality "finished goods" image on the shelf to the consumer.

To develop and maintain a system designed to reinforce ongoing efforts toward reduction of retailer-responsible damage every time an item is touched.

To utilize the most efficient, low-cost reclaim centers possible.

To bill for damage within the guidelines of the current agreement between Safeway and manufacturer, reflecting actual costs. Our intent is not to generate a bottom-line profit on unsaleable product.

To continue an ongoing working relationship with manufacturers and review industry best practices, taking advantage of available unsaleable reduction opportunities.

Safeway abides by the presumptive allocation of responsibility for product damage described in the Joint Industry Report. In addition, we engage in ongoing efforts to reduce retailer-responsible damage. Our efforts have dramatically reduced our reclamation center costs. Because we seek to recover reasonable offsets for these expenses, our invoices incorporate our actual costs.

We follow the Joint Industry Report's method for identifying the three main components of cost for which a distributor of goods is entitled to fair reimbursement. These components are pre-damage direct costs, post-damage handling costs, and reclamation center processing costs.

Pre-damage costs are those costs we incur from the point Safeway receives the product to the time it reaches the store. Such costs include warehouse handling and storage, transportation to the store, and shelf stocking. We will consider manufacturer-supplied values if such values are reasonable. Otherwise, we incorporate a figure for each item based upon a DPP or ABC model.

Post-damage costs are those expenses to remove the unsaleable goods from the shelf and transport them to the reclamation facility. The average value derived by the Joint Industry Report study, 11.1 cents, is utilized.

Reclamation center costs are those actual expenses we incur to have an unsaleables receiving/sorting/disposition facility operated for us. We use our actual per-item expense, as paid to the reclamation center operator during each accounting period, to derive this figure. For our centers in the continental U.S., this value ranges from 11.5 to 12.5 cents per item. The following disposition fees are then added to the base reclamation center cost-per-item fee, as appropriate:

Retailer Option	$0.01
Donate	$0.03
Dispose	$0.06
Sort / Hold	$0.10
3rd party On-site Review	N/A (competitive PRC Company)

Safeway strongly encourages manufacturers to be directly involved with examining product returned to the centers. We find that manufacturers reap the greatest rewards when they inspect product first hand.

Payments to Safeway under this policy are collected via deduction from invoice, at Safeway's sole option. We do not offer payment via draft as an option.

While it is not practical for us to identify product for special handling, each Division will designate the timing of its regularly scheduled damaged product pick-ups. If you have further questions, please contact Bruce Hayworth at (925) 469-7107.

Please complete Reclamation Disposition Agreement.

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