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Sustainability Report 2015 of the MEGGLE Group

374.4 Suppliers 4.4.1 Farmers and industrial raw material suppliers 4.4 suppliers In a way, milk producers and milk processers share a common destiny that can only be lastingly successful if they pull together and work closely. We have cultivated these kinds of partnerships with our dairy farmer suppliers for many years, in some regions for over 80 years. Since time immemorial, MEGGLE has also employed staff to take care of the milk producers. Company developments, the milk market, political and socio-political conditions, as well as issues of milk quality, are discussed on site or at meetings. The advice on quality for the milk suppliers focuses on feeding, hygiene, the absence of residues in milk and the udder health of cows. The success of this advice is reflected in the Bavarian and nationwide above-average quality of the milk. Regular checks of the milk – in particular the germ content, cell count, ingredients and freedom from residues – are carried out by an external organisation, the Milchprüfring Bayern (Bavarian milk testing organisation), who confirm the high level of quality. In particular, the cell content of the milk, a measure of the health of the animals, which is approx. 150,000 cells per ml, is an excellent measurement and allows conclusions to be drawn on the welfare of the cows. The expertise in Wasserburg, with respect to the supervision and support of milk producers, is also discussed at regular intervals with colleagues from the subsidiaries in Eastern Europe. In this way, we not only improve the quality of the milk there, but also help to support the farmers’ suppliers and their families at the same time. Moreover, the payments made to the milk suppliers are usually above average. This is our contribution to ensuring the commercial stability of the dairy farms. MEGGLE maintains close commercial ties with many whey suppliers that go above and beyond the usual supplier-customer relationship. For instance, MEGGLE initiated and pre-financed an evaporation system for concentrating whey at the premises of an Italian whey supplier. This cut back the freight volume of the company by around 70%, which equates to 740 trips of 550 km each every year. The environment, too, plays a role, especially in milk collection and in collaboration with the milk producers. Round programme planning, which takes volumes and routes into account, is being optimised with the objective of ensuring further improvements in effective fuel consumption. Above average across the board 4.4.2 Other suppliers We want to set a good example to our suppliers in terms of sustainability, which is why our corrugated cardboard transport packaging contains a large percentage of recycled material. We also participate in various recycling systems, such as the Green Dot and REPASACK. In addition, we encourage our partners to actively assume a sustainable approach by carrying out sustainability checks on new suppliers and auditing existing suppliers on a regular basis. Business relations between the MEGGLE Group and its suppliers are oriented on the BSCI- Codex (Business Social Compliance Initiative) which lays out detailed sustainability principles and associated requirements. It is an integral part of the supplier selection process and is integrated in all purchase agreements throughout the group. Exemplary sustainability

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