Fortnum & Mason Corporate Social Responsibility Policy 2011

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1. Introduction 3

2. Fortnum & Mason – About our Business 6

1. Company details 6 2 Description of our business 6 3. Main products 6 4. Main services 6 5. Main suppliers 6 6. Main customers 6

3. Fortnum & Mason – Products and Suppliers 7

1. Mission statement 7 2. Food buying pillars 7 3. Fashion and Home buying pillars 9 4. Requirements for own label

and proprietary brands 10 5. Animal welfare 13 6. Local sourcing 13 7. Foie gras 15 8. Organic food 16 9. GMO 16

4. Fortnum & Mason – The Environment 22

1. Environmental statement 22 2. Environmental policy 23 3. Carbon management policy 23 a. Energyefficiency 23 b. Waste management 24 c. Packaging 24 d. Couriers 24 e. Supply chain 25 f. Construction 25

5. Fortnum & Mason – The Community 26

1. Charitable giving 26 2. Volunteering 27 3. Local organisations 27 4. The Arts 27 5. Piccadilly Project 27

6. Fortnum & Mason – Our People 28

1. Equal opportunities policy 28 2. Skills and training 29 3. Staff engagement 29 4. Benefitsandreward 30

7. Fortnum & Mason – Our Customers 32

1. Service 32 2. Value 32 3. Quality 32 4. Communication and engagement 32 5. Accessibility 32

CONTENTS

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INTRODUCTION

Fortnum & Mason was founded in St. James’s more than 300 years ago.

From the very beginning the business sought to provide groceries and

related products of the highest possible quality to discerning customers.

The business developed into a unique emporium selling goods that

were available nowhere else, often being the first to introduce new

products such as spices and teas in the 18th century and hampers in

the 19th century.

The business is fiercely proud of its heritage and traditions, but is

equally enthusiastic about introducing change and developments to

meet the requirements of today’s business and its key stakeholders.

From a single store in Piccadilly, the modern business now comprises

not only the flagship store, but a rapidly developing mail order and

internet business, five restaurants, an event’s catering business and a

strong international presence, with Fortnum & Mason products being

sold in 14 countries around the world.

Fortnum & Mason is a privately owned business which allows us

to take a long term view of our business activities and to always do

what is right for the long term sustainability of the company and

what is right in terms of our social and environmental responsibilities.

Our vision for the business is that we should strive to be:

“A prosperous and very English retailer of the most inspiring products and services in the world across food, drink, entertaining and celebration for customers who want the very best.”

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ValuesUnderpinning all our activities are our values

by which we constantly judge our actions.

IntegrityWe will always be honest and sincere in our dealings with customers, staff, suppliers and other stakeholders. We will deliver what we say we will deliver, and we will always be consistent and straight forward in our dealings with others. We will be uncompromising in terms of doing the right thing and being good citizens.

Innovation We will continuously challenge the status quo and convention in pursuit of innovative and creative ideas. We will be pioneering in our thoughts and actions, seeking out the best ideas and products from around the world.

InspirationWe will aim to inspire, surprise and delight our customers, staff, suppliers and other stakeholders by offering the unexpected and exceeding expectation.

ExcellenceEverything we do we will do to the highest possible standard to meet the most discerning standards.

EthicalWe will ensure that everything we do is to exemplary standards of conduct, is sustainable and morally defensible. We will ensure that the way in which we carry out our business is rewarding for all those involved.

EnduringWe will ensure that everything we do is suitable for the long term sustainability of our business, our community, our environment and our stakeholders. We will never take the expedient short term route where the enduring longer term solution is a better one.

In this report we have focussed on the key elements of our CSR policy; our products and suppliers, our environment, our community, our people and our customers.

We are totally committed to upholding the highest possible standard of corporate responsibility. We recognise, however, that we have more to do. With the comprehensive refurbishment of the Piccadilly store for our tercentenary in2007,wehaveaddedfloorspaceandintroducedsomeaircooling,allofwhichaddstothechallengeofreducingour energy consumption.

We are determined to ensure that corporate responsibilities are embedded in all our activities and reviewed regularly at the highest level against measurable targets.

Webelieve that this report illustrates thatwe havemadeprogress this year and confirmsour commitment to drivecontinual improvement. We are committed to continuing our long tradition of ethical business practices into our fourth century.

March 2011

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1. Company Details:-• Turnover o £56.1m at 53 weeks ending 18/7/10

• Employees o 450 as at 27/7/10

• Tradinglocations o Piccadilly, London o Terminal 5, Heathrow o UK Airports o Japan o Europe

• Typeofbusiness o English luxury retailer and restaurateur with the

product categories of food, drink, entertaining and gifting.

2. Description Of Our Business Fortnum & Mason is a multi channel retail and

hospitalitybusiness.Itsoperationsinclude:• Piccadillyretailandhospitality• Mailorder• Internet(UKandworldwide)• Corporatesales• UKairports• Internationaldivision• Eventscatering(Fortnum&MasonEvents)• Privatefunctions

3. Main Products• Tea• Groceries• Confectionery• Hampers• Wine

4. Main Services• Retailshopping• Restaurants• Eventscatering• Internetshopping• Mailordershopping

5. Main Customers• Privateindividualcustomers• Corporateclients• Organisationsforeventcatering• Japaneseoperatingpartner–Juchheim• Airports

We work closely with our suppliers and customers to ensure that quality assurance and product integrity are maintained at all times.

Environmental issues relevant to the business are discussed at monthly board meetings, with the Managing Directors holding direct responsibility for driving continual improvement.

Chapter 2Fortnum & Mason – About Our Business

Fortnum & Mason was established in 1707 and has been owned

by the Weston family since 1951. The Garfield Weston Foundation

owns 79.2% of Wittington Investments which is the ultimate holding

company of Fortnum & Mason. The current chairman, Kate Hobhouse,

is the granddaughter of Garfield Weston.

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1. Mission Statement

Fortnum & Mason will only source and stock the best quality products

for own label lines and proprietary brands. We work closely with our

suppliers to develop product that is as natural as possible, only using

quality ingredients without using unnecessary additives or chemicals.

2. Food Buying PillarsThese are our principles for developing own label products but they also apply to the proprietary products that we buy.

• Quality–Weprovideourcustomerswiththebesttastingfoodbyensuringthatweuseonlythefinestingredientsand production methods. We only work with the most skilled producers and always try to promote traditional and artisan methods of production. Our rigorous quality control procedure and standards of traceability ensure not only that our products are safe and always reach our customers in peak condition, but that also the stipulated highest quality ingredients are used throughout the supply chain. Our breadth of range will always ensure that we have the right quality for any occasion.

• Englishness–AcrosseverythingFortnum&Mason isanddoes runs itsEnglishcharacter.Thecompany isa fusionofeclectic influences.WeprovideourcustomerswitharangeofproductseithersourcedfromEngland,havebeenadapted to the English taste, or stem from our heritage.

• Seasonality–Wealwaysaimtoprovideourcustomerswithaseasonalrangeofproducts.TheseproductsreflecttheBritish growing seasons. This philosophy extends to the recipe based products not just the fresh produce. We also develop products for the major English celebrations, English traditions and the leisure activities of our customers.

• EthicalandEnvironmental–We never deviate from our CSR policy. Many of our suppliers are very small, and we support them to ensure a continuing supply. We always develop close relationships with our suppliers allowing us to ensure that they are following a responsible code of conduct towards any livestock and to ensure that they and their employees are being paid a fair price for a product.

We do not subscribe to any one Agricultural Policy, we subscribe to agricultural practices where tradition and time are respected. Animal Welfare is very important to us and we believe if kept to the highest standards it also leads to a discernabledifferenceinproductflavour.

Wherever possible we always support rare breed meats that are traditionally bred, reared and handled as we believe this results in a better quality meat. We like to source our beef, pork and lamb from the Royal farms.

All products containing livestock are also consistent with our CSR policy.

We are currently working toward removing all non-essential food additives from our recipes i.e. those that are not required for a technical function, endeavouring to use natural alternatives.

Chapter 3Fortnum & Mason – Products and Suppliers

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Fish–Weaimtostockonlycoldwaterfishfromaroundthe British Isles and for our stock to conform to the Marine Conservation Society guidelines for fish to eat and fishto avoid. We are a traditional retailer with a long history of selling traditional products such as smoked salmon. We recognise that some species may be considered to be ‘at risk’, however, we endeavour to source such species from the most sustainable and environmentally sound fisheries/farms.We aim to activelymanage our range tolimit and/or provide alternatives to such species. We also aim to educate and diversify our customers’ taste in order to take demand away from vulnerable species.

Three major factors will be considered during our buying decisionforfish• Capture area/stock – only buy where fish level is

deemed sustainable• Fishingmethod-wildandfarmedfish.Allfarmedfishto

besourcedfromaccreditedfisheries(SoilAssociationorRSPCAFreedomFood)

• Breedingseason–willnotsourcefishduringthespeciesbreeding season

We buy individual wild salmon caught off the North East of England, Scotland and in English rivers. Salmon fishingbynamedlicensedfishermen,usingnetsandputches,yieldsnaturally reared fish which are healthy, lean and betterflavouredthanintensivelyrearedfarmedfish.Fishfarmsarecarefully chosen for their choice of diet, stocking density and tidal waters. We allow customers to choose between wild, farmed and organic farmed in both fresh and smoked salmon.

Caviar is another traditional product we have sold for many years. We abide by the recent 5 year ban on quotas for Wild Caviar imposed by CITES and DEFRA. However, we will continue to sell the small quantity of wild caviar stock we have left. We have many farmed caviar alternatives including organically farmed caviar, to offer choice to all our customers. All our caviar carries full CITES accreditation stating where the caviar is from and giving us full traceability. Our pricing policy reflects the increased availability of farmed caviar,and the exclusivity of wild caviar. Our suppliers use all the sturgeon by product in further processing.

Beef –We only buy beef from farms that we feel have a deep respect for the breeding of steers in a stress free manner. The stewardship of the land on which these animals graze is of the utmost importance as we believe it directly affectsthewelfareandtasteofthefinalproduct.

Rather than using only the primal cuts, we strive to use as much of the carcass as possible through the supply chain within our business.

We only stock veal that is English, free range, rosé and organic.

Pork–We aim to buy extensively reared pigs that comply with UK Animal Welfare guidelines that are over and above the EU legal standards. We are also working toward ensuring that any processed product from our continental suppliers complies with UK standards of Animal Welfare.

Lamb –We only source rare breed, extensively reared lambs/sheep that have been bred specifically for theirflavour,webuyrarebreedwhenpossible.

Poultry –We never buy from intensively reared farms. We always ensure that we buy from free-range farms.

We are working toward using free-range eggs in all products made using egg.

Wherever possible we buy game from named shoots/estates, preferably from wild game shoots with strong conservation policies.

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Home&Beauty–Theseproductsaremoredifficulttotrack,but we work closely with our suppliers to ensure that none of the animal species, fauna or flora is from endangeredspecies. Fortnum & Mason works to the guidance andrecommendationsofC.I.T.I.E.S(ConventiononInternationalTrade inEndangeredSpecies) toensure that internationaltrade in specimens of wild animals and plants do not threaten their survival.

Skins– We strive to use skins from sustainable sources and do not support the rearing of animals for the sole purpose of using their skin. We acknowledge animal welfare concerns surrounding the capture and killing of wild animals such as snakes, crocodiles and other reptiles. We do not promote the use of endangered or threatened species and use C.I.T.I.E.S and REDLIST data as guidelines for these practices.

Hair&Horn–We promote the use of hair and horn from sustainable sources that are a by product of the animal rather than its sole purpose. We are supported by, and refer to, our HealthandVeterinaryCertificatesandSupplierDeclarationArticles for advice.

Cotton–We will support the growth of organic cotton and wool, which ensures they are 100% naturally grown without chemicalsortheuseofgeneticallymodifiedseeds.Wehaveproduced an allergen policy to which we refer to promote theuseoffibreproductionprocessesthatreducetheriskofan allergic reaction.

Leather– We strive to use leather that is a by product of an animal’s life, taken from sustainable sources. We support the use of non-toxic varnishes and glues being used in the production of leather products.

Silk/Fibre–Weaimtopromotetheuseofalternativefibres,including silk and hemp, which reduce the fashion industry’s reliance on chemicals and any consequential allergy reactions.

Feathers –We strive to support resources that are a by product or natural occurrence of life from sustainable stocks. We do not support the use of endangered species or gratuitous practices.

Wood, Card, Paper – Forest Stewardship Council (FSC)certification is an increasingly important part of socialand environmental standards in the market place. It is our practice to support and encourage suppliers to have FSC accreditation. We promote the use of recycled card and paper products.

Animal Testing – We believe in improving the quality of human and animal life while taking responsibility for respecting the animals that support the research and for treating those animals humanely. We believe that research using animals should be well regulated. We support testing laws and regulations (Animals [Scientific Procedures] Act1986)thatrecogniseanimallifeasvaluableandthevalueofhuman life in animal testing.

Craftsmanship – We support traditional craftsmanship of highly skilled and artisan suppliers, which allows us to offer exclusive and bespoke products.

Processing – We have a Food Technologist specificallytrained in Animal Welfare. We aim to have all manufacturers inspected and compliant with EU accreditation. It is our priority that the factories are traditional and as close to the product source as viably possible. Above all our philosophy is that all animals are treated with respect.

Discovery – Fortnum & Mason built its reputation oninnovation and we will always continue to search for the bestandthemostoriginalproducts.Westrivetobefirsttomarket and take pride in showcasing new and imaginative producers. We take advantage of the rich history of the business and encourage the promotion of classic trends. Weare always prepared to develop or find products foradventurous consumers.

3. Fashion and Home Buying PillarsFortnum&Masonispredominantlyknownforbeingafoodretailerbutwetakegreatprideinsellingpremiumqualityfashionand home goods as well. In order to maintain our high standards the following principles are vigorously maintained:• Quality–We provide our customers with luxury products by ensuring that we use only the best materials and production

methods. We work with the most skilled producers and always try to promote traditional and artisan methods of production. We are working with our direct suppliers to apply quality control procedures and standards of traceability to ensuretheproductqualityismaintainedtoanagreedspecification.

• Englishness–AcrosseverythingFortnum&Mason isanddoesruns itsEnglishcharacter.Thecompany isa fusionofeclecticinfluences.WeprovideourcustomerswitharangeofproductssourcedfromEngland,beforeworkingwithartisan,exclusive and distinctive suppliers from across the globe.

• Seasonality–Weaimtoprovideourcustomerswithaseasonalrangeofproductstoreflectthefashionseasonsandfashion trends. We develop products for the major English celebrations, English traditions and the leisure activities of our customers. This philosophy extends to the home departments in addition to fashion lines.

• EthicalandEnvironmental–We assess both the brand and the product against our CSR policy, taking information of relevanceandpertinencefromoursuppliers’CSRquestionnaires,auditsandspecifications.

We are working with our direct suppliers to ensure their commitment to best practice on all issues, such as protecting the environment, animals, child labour and renewable resourcing, to deliver ethical quality goods.

We do not subscribe to any one manufacturing policy; we promote practices where tradition and time are respected. It is our aim to promote and implement progressive sustainable practices across the fashion design, sourcing and manufacturing supply chain.

We have introduced quality assurance procedure, alongside a product traceability programme to aid best practice.

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• Ownlabelproductdevelopment-Sevenstageprocess:

1. Intent to supply agreement 2. Audit of premises 3. Review of manufacturing processes 4. Productspecification 5. Shelf life testing 6. Labelling 7. Design and packagingAll stages of the own label product cycle is monitored and kept electronically on theTechnical Database (HamiltonGrant).

• Acceptancecriteria

Unless the following criteria is provided and adhered to aproductwillnotbestockedatFortnum&Mason.

• ProductReview/Intenttosupply

o Availability of product o Seasonality o Exclusivity o Methods used for manufacture •Istheproductorganic? •Haveanychemicalsbeenused? •IsthereanyriskofGMOwithintheproduct? o Labour o Working conditions for employees/guaranteed no

slave/child labour o Quality of product o Legality o Safety of product o Food safety procedures o Sensory testing/approval

• ProductSpecification

Specificationsmustbecompletedbythesupplierbeforetheproductcanbeofferedforsale.AspecificationmustbecompletedforallFortnum&Masonlabelproducts

o Fortnum&MasonProductSpecification(QAF:01) o Fortnum&MasonWineSpecification(QAF:101) The product specification will be monitored and

enforcedbytheFoodSafety&TechnologyDepartment.AnyamendmentstothespecificationmustbesenttotheFoodSafety&TechnologyDepartmenttoupdatethespecificationheldonfile.

• SupplierApproval

Our buyers must personally visit premises, interrogate both product and its creator and understand their philosophy. If we feel they share our values then we work with them to bring their product to our customers–andtodevelopnewandinterestingideasfor the future. Many of our sources are very small and we support them to ensure continuing supply. After this initial agreement to enter into business, the following information/documents must be obtained prior to acceptingthefirstdeliveryoffinishedproduct:

• SupplierSelfAuditQuestionnaire • Audit • Productspecifications • Financial/creditcheck • Finalartworkapproval

4. Requirement for Own Label and Proprietary BrandsDuring the development of own label products the following procedures are followed. Own label products are continually reviewedthroughoutusingaQCrotatoensurethattheagreedproductspecification,processingproceduresandpackagingstandards are maintained throughout each production run. By continually reviewing our products it will show if further development of the product is required. This QC rota allows us to monitor and maintain regular communication with our suppliers regarding the products they produce for us.

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• Supplierfoodsafetyandapprovalrequirements

Traceability Procedures All products supplied/made for Fortnum&Masonmust have full traceability andmust be traceable one step forward and one step backwards through the chain, as per the General Food Regulations2004(178/2002–Article18).Traceabilityisrequired in order to accommodate a full product recall orwithdrawalofaproductfromthemarket(178/2002–Article19)

Lotcodes The supplier must provide lot codes on all products to ensure traceability and to comply with The Food (Lot Marking) Regulations 1996. Each productwill have a unique reference number relating to the productionrunthisnumberidentifies.

Any product decanted by our Catering team will ensure that use before dates are clearly marked on the boxes provided for storage.

Manufacturing Processes All suppliers must comply with 852/2004 The Hygiene of Foodstuffs. Under this regulation are a number of articles which must be met in order to produce safe food. Suppliers must have strict manufacturing processes in place to ensure that food safety is managed throughout the entire manufacture process. Procedures based on HACCP principles (HazardAnalysis&CriticalControlPoints)mustbeinplace and documented, as per article 5 of 853/2004.

Shelf-lifeTesting The acceptable life of the manufactured product must be established so that its safety and integrity are not compromised. Shelf life data must be available for both the unopened and opened product.

Testing is required on both ambient and chill temperatures to ascertain the time over which the product can be stored without the loss of quality or compromising any food safety element, thereby determining the optimum in-store display parameters (timeandtemperature)andconsumerlife.

NutritionLabellingNutritional analysis must be carried out on all products that will be offered for sale to Fortnum & Mason’s international food markets. Nutritionalinformation must be provided to meet labelling legislation requirements of our export markets. The Buyer is responsible for ensuring that the supplier carries out full nutritional testing, which must either be recorded on the specificationoracopyoftheanalyticalreportmustbesent to the Food Technology Department.

ProductLabelling All products must comply with The Food Labelling Regulations 1996 and requirements on what information must appear on the food and how it must appear.

o Name of the food o List of ingredients o Quantity of certain ingredients or categories

of ingredients o Appropriate durability indication o Any special storage conditions or conditions

of use o Name or business name and address or

registeredofficeofeither o Place of origin or provenance of the food

if failure to provide this could mislead the customer

o Instructions for use, if failure to do so may mislead the customer

o Allergen information o Netweightorvolume–WeightsandMeasures

Act1985andWeightsandMeasures(Packaged Goods)Regulations2006

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Chemicals Our policy has always been not to use chemicals where they are unnecessary, and not to use chemicals known to be hazardous. However, food additives may need to be used and when used, must be usedasperthespecifiedregulationsfortheproduct.

Werecommendthatoursuppliersusenaturalflavoursand colours whenever possible and any other additives that must be used to perform a technical function are sourced from natural sources.

SupplierDocumentationrequired

o Sourcing Policy o Food Safety Hygiene Policy o Environmental Policy o Ethical Policy o Foreign Body Prevention Policy o Glass&HardPlasticsPolicy o Pest Control Policy o HACCP o Manufacture Process Flow Document o Allergen Policy o Fortnum&Masonsupplierselfauditquestionnaire o Fortnum&Masonproductspecification o Fortnum&Masonproductstandardsdocument

HighRisk MediumRisk LowRisk

Cookedmeat&poultry products

All other fresh foods not listed under the High Risk category

Ambient stable foods(bread,biscuits, cereals, crispsandcakes)

Cooked meat products(includinggravy, meat pies, pâté, cook-chill meals)

Preserved foods e.g. sterilised milk or canned food whilst unopened

Cooked eggs and egg products, particularly those made with raw eggs and not thoroughly cooked

Dried products

Shellfishandotherseafoods

e.g. raw oysters, mussels and cooked prawns

Acid foods e.g. fruit, vinegar or products stored in vinegar(pH<4.5)

Cooked rice Fermented products e.g. salami or pepperoni

Dairy produce (includingmilk,cream, custards, ripenedsoft&moulded cheeses, and products made from unpasteurised milk)

Foods with high sugar/salt/fat content e.g. jam or chocolate

Audits When new suppliers are engaged, a Supplier Self Audit Questionnaire must be completed and sent to theFoodSafety&TechnologyDepartmentforapproval.From the information provided in this document and therisklevelofthefoodoperationtheFoodSafety&Technology Department will decide who will carry out the audit of the premises.

Suppliers will be classed as high, medium or low risk and this will dictate how often and who is able to carry out the audit.

•HighRisk Every12months

•MediumRisk Every18months

•LowRisk Every36months

Product Integrity To maintain the integrity of the productssuppliedtoFortnum&Mason,anumberofprocedures have been put in place throughout our internaldistributionandstorageprocessuptothefinalpoint of sale.

o Receiving procedure o Storage o Dispatch/mail order of fresh food o Food Safety Manual for food counter staff o Internal audits o External audits by an independent

3rd party auditor

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5. Animal WelfareFortnum&MasonworkscloselywithitsUKsuppliersofanimalproductstoensurethattheprotectionofthehealthandwell being of the animals are maintained to a high standard. UK suppliers must work to the ‘Five Freedoms’ framework which must apply whether on the farm, in transit, at market or at a place of slaughter.

FiveFreedoms(FarmAnimalWelfareCouncil)

1. Freedom from hunger and thirst2. Freedom from discomfort3. Freedom from pain, injury or disease4. Freedom to express normal behaviour5. Freedom from fear and distress

6. Local SourcingWe buy our goods as close to home as we can, from suppliers with sustainable agricultural policies. 86% of our suppliers are from the UK with our closest source being the bees on our roof on Piccadilly. We support small suppliers of excellent quality goods, always buying to quality rather than price. We are often the sole remaining stockists of a particular producer, doingourutmosttokeeplocaltraditionsaliveandprofitable.

Casestudy

One of the ways we can demonstrate our commitment to sourcing product from the UK is the recent decision to relocate our tea business. The incumbent supplier has been an excellent supplier for the past 50 years but decided to move their main production outside the UK. We felt that this didn’t sit with our brand values so we madethedifficultdecisiontomoveourbusinesstoaBritishsupplier.

The History of Ringtons

Ringtons was founded in 1907 by Samuel Smith, and it remains a family business: three of Sam’s great-grandsons are actively involved in running the company today, and are totally committed to Sam’s founding values of quality and service. The business is still built on the uniquely close relationships which the van salespeople have with their customers, many of which go back over several decades: Glyn Meredith recently retired after delivering to the same groups of houses and customers for 42 years.

The company began in 1907, when Samuel Smith moved from Leeds to Newcastle to set up his own tea delivery business. With an initial investment of £250 from a business partner, William Titterington, Sam began making door to door tea deliveries to customers using his instantly recognisable horse and carriage. The Ringtons name was formed from the last part of the name Titterington, with the ‘S’ for Smith.

A year later, two horses were in operation and Sam Smith had four loyal assistants to help cope with what was a rapidly expanding enterprise. By 1914, Samuel Smith had bought out William Titterington’s share of the business and Ringtons was growing into a true family business - Samuel’s son, Douglas, joined the company as a tea delivery boy.

The business is still built on the uniquely close relationships which the van salespeople have with their customers, many of which go back several decades.

There is an accepted link between good welfare practices and the production of good carcass and meat quality. In orderforFortnum&Masontoassessthewelfarepracticesofitssuppliers,Fortnum&Mason’sFoodTechnologistisatrainedAnimalWelfareOfficer(AWO).

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The First World War had a huge impact on the company.Manyof theemployeesweresenttofightfor the country and rationing and sales laws were put into force. Samuel promised the servicemen their jobs would be waiting for them on their return and sure enough, all 12 surviving members of his former staff came back to their jobs.

In the early 1920s, Ringtons bought two motorised vehicles, although it seemed that most customers still preferred their tea delivered by the traditional horse and cart, and it wasn’t until 1962 that the last horse (Monty)finallyretired.

Ringtons was again seriously affected by the Second World War. Over 400 Ringtons employees, including Samuel’s fourgrandsons,werecalleduptofightandby 1943, 200 vans were taken off the road. Once again, the business was kept going and the surviving servicemen, including his grandsons, returned to work for the company.

Samuel Smith passed away aged 77 in 1949 and his sons took on the business. This was only the beginning of Smith generations following in their parents’ footsteps.

After over 100 years, the famous Ringtons vans still continue their door to door deliveries all the way from Scotland down to Peterborough and from Lancashire acrosstoEastAnglia,atotalof28salesofficesserving275,000 households. They blend all their own teas, and roast all their own coffees. Ringtons opened their newfactoryin1992,buttheheadofficeisnextdoor to the original factory in Byker, which is a famous local landmark.

Now, the fourth generation of the family, Nigel, Simon, and Colin Smith, run the business on a daily basis as it continuestoflourish.

All Fortnum&MasonTeas are purchased in accordancewith Ethical Tea Partnership (ETP) standards. Thesestandards aim to ensure that all its tea is from sustainable sources.

The ETP began work in 1997 as the Tea Sourcing Partnership, an organisation started by a number of UK based tea packing companies who decided to work together on sustainability issues in their supply chains, rather than to compete on ethics. Membership grew rapidly and there are now twenty members from Europe, North America and Australasia.

In September 2004 they changed their name to the Ethical Tea Partnership. In its 12 year existence, ETP has grown in geographical scope, gradually covering all the major tea export regions. They are now active in all areas of the worldwhereF&Mpurchasesitsteastocks:China,NorthIndia(Assam,Darjeeling),SouthIndia(Kerala,TamilNadu),Indonesia, Kenya, Malawi, Sri Lanka and Tanzania.

ETP’s Regional Managers work with producers to address issues identified by monitors and support sustainabilityimprovements. As well as organising its own monitoring of estates,ETPworkswithcertificationprogrammesoperatingintheteasectortofacilitatethirdpartycertificationwherethis is of interest to producers and ETP members (e.g.Fairtrade,RainforestAlliance).

ETP also works with a range of development agencies, government and UN organisations and technical specialists on projects to improve the lives of workers in the tea sector.

TheETPisamemberoftheEthicalTradingInitiative(ETI).All suppliers are requested to supply details of their own environmental policy along with a requirement to verify that fair trade and ethical standards are observed at all times. All practices are reviewed annually.

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Fortnum&MasonGoldStandardfortheproductionoffoiegras

• WewillalwayssourceourgoosefoiegrasfromFrance,the livers will be from designated areas of France with Frenchproducersmanufacturingthefinishedproduct.

• We will always use farms we have approved, wherethe farmer/stockman lives on site and manages the geese through their life cycle and personally feeds them during the gavage process.

• Wewillalwaysauditthefarmsourselvestoensureallour standards are being met.

• We will always insist on receiving and inspecting fulltraceability and due diligence documents once a month, to ensure that only our approved hatcheries, farms and processors are being used.

• Wewillalwaysensurethatourbirdsareraisedinflocksof no more than 450.

• Wewillalwaysensurethatourbirdsarerearedtofreerange standards up to their 15th week.

• Wewillalwaysensurethatarebirdsareabletofeedanddrink ad libitum up to 13 weeks when their food shall be given twice a day to help build their oesophageal muscles.

• We will always ensure that the ‘salle de gavage’ hasclean air circulating, that the temperature is closely monitored with a cool air system in place and that the lightingissufficientlylowtoavoiddistressingthebirdsandsufficientlybrighttoallowthefarmertobeabletoconstantly check on the birds.

• Wewillalwaysensurethatthebirds(whilstinthe‘sallede gavage’) are inopen toppensensuring theyhavefreedom of movement, are able to open their wings and are able to interact with each other.

• Wewillalwaysensurethatthegeesearefed4timesaday to ensure the doses are smaller, reducing the risk of damage to the bird and aiding its digestion.

• Wewillneverallowourgeesetobefedfatorsteroids;we will only allow them corn with the necessary vitamins and minerals for their well-being.

• Wewillneveruseclosedtoppensinthe‘salledegavage’.

• Wewillneverputringsthroughtheirbeaks.

• Wewillneverallowourbirdstoreachastagewheretheycan’t support their own weight and move around freely.

• Wewill never transport the livebirds formore than 30 minutes from the farm on which they are reared.

7. Foie Gras

Fortnum&Masonisatraditionalretailerandoverthecenturieswehaveestablishedastrongreputationforsupplyingtraditional foods, amongst which is foie gras.

We fully acknowledge the issues and concerns people have about the production of foie gras, therefore in 2005, we completely reviewed our policy and put together our Gold Standards for production which have now been fully implemented.

Throughour research,we identified thatduck foiegras isproducedasa relatively inexpensivecommercialproduct inintensively reared farms, so we took the decision to discontinue duck foie gras and we now only sell goose foie gras from artisan producers who have the utmost concern for the welfare of their birds.

We only source our foie gras from two farms in France, which we visit and audit regularly to ensure that our Gold Standards arebeingmaintained.Ourbirdsarekeptinsmallflocksandarerearedfreerangeuptotheir15thweek.Thefarmerliveson site and manages the geese through their life cycle and personally feeds them by hand during gavage. At every stage of their life, the birds are free to move around and during gavage they are fed with corn four times a day to aid digestion. We also monitor the death rate on the farms and we have no deaths reported in our birds during the process of gavage.

Withthesemeasuresinplaceweareconfidentthatourfoiegrasisproducedinthebestpossiblewayandthatthebirdslivesareasatleastfulfillingandstressfreeasthatofotherbirdsraisedforthepoultrymarket.

8. Organic Food

Fortnum&Masonhasneverovertlypromotedour involvementwithorganic food. However,wecarrymanyorganicproducts in our departments, most notably our fresh food areas where we stock many organic raw protein products, charcuterie products and cheeses.

We generally work with small scale producers where time and tradition are respected and even where products are not certifiedasorganic,theproductionethosisinlinewithorganicproduction.

We do, however, recognise that we have a number of gaps in our assortment for organic options and we are excited about the work we are doing with an organic food brand to introduce a new range of organic products to sit alongside our own label assortment.

9. GMOs

We have been GM free since 2002 and do not stock products which contain hydrogenated fats. The palm oil which we use is sustainably sourced. We are scrupulous in our insistence that as far as possible our goods are free of chemicals and we are working toward being NAFNAC in our confectionery department.

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Casestudy–product

Fortnum & Mason Honey

A plan to put beehives on top of a building in the middle of Piccadillymight seem like a flight of fancy.But ever since a colony of bees took up residence on Fortnum&Mason’s rooftop, they have been happilyproducingatrulydelicioushoney–sogoodthattheserather exclusive bees have created a waiting list for their produce.

Fortnum’s Sweet Grocery Buyer Jonathan Miller designed the extravagant beehives himself, giving each adistinctarchitecturalstyle–Roman,Mughal,ChineseandGothic–aswellasacoatofeaudenilpaintandsome rather elegant gold details. ‘I knew that if we were going to produce our own honey, the hives just had to be something special,’ explains Jonathan. ‘I wanted something distinct and fun but utterly in keeping with Fortnum’s. I decided to use different styles, but all classical ones, the sort that a good Georgian architect would have understood. One result is that the bees have got plenty of space. By bee standards, these are palatial residences.’

It had long been Jonathan’s goal to have bees producing honey on the spot, as it were, rather than brought in fromthecountryside,andtheplanfinallytookshapein the summer of 2008 when the bees produced their firstcrop.

The honey, called simply Fortnum’s Bees, was a lovely pale, toffee colour with a soft consistency, a light and delicate flavour and a pleasing finish.Thatfirst crop tasted of the Oxfordshire countryside,where the bees had been staying before they were transported to London. The second crop, the result

of their forays into London’s parks and gardens, had subtle traces of chestnut and lime, giving it depth and freshness. The bees have a radius of around three miles, which encompasses St James’s Park, Green Park and Buckingham Palace, as well as any number of private gardens. Gardens in London are often planted with a dazzlingarrayofexoticflowers,whichmeansthatthehoney’sflavourisquiteunpredictable,andchangeswithevery crop.

The bees should produce two crops a year, but are very sensitive to the weather; in 2009 a spell of wet weather discouraged their efforts and a second batch never appeared. So Jonathan is eagerly awaiting this year’s late crop, as it will have an entirely different flavour, infusedwith latesummerbloomsrather thanthe tree blossoms of spring.

Not every honey lover can get on to Fortnum’s rooftops to see the hives for themselves, so on their behalf, Jonathan installed a beecam, which has attracted a considerable following. One camera is positioned totrackthebeesastheyflyinandoutoftheirhives;the other captures the view from the hive across the City to the iconic Gherkin, whose shape is remarkably similar to the finials decorating the hive roof. Thisparticular view rather nicely contrasts the simplicity of a hive full of bees, doing what they have always done, with the steel andglassof abrandnewbuilding–ahuman hive, if you like. Jonathan admits that it is rather pleasant to go up on to the roof and see the bees at work–itgivesoneasenseofequilibrium,amongstthedisorder and noise of the city.

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Any potential concerns about urban bees can be quickly allayed; the bees are Welsh Black Bees, known for their gentle ways, so they are less likely to sting unsuspecting shoppers and tourists. In fact, in all the time the hives have been in position, none of Jonathan’s rooftop visitors have ever been stung – not even the bold photographers,poking their lenses in through the hives’ front doors. As for pollution, it is not an issue; nectar sits deep within a plant and is sucked up by the bee’s proboscis, then taken straight to the hive and sealed into the honeycomb, safefromoutsideinfluences.

Fortnum’s Bees was just part of a thorough overhaul of Fortnum’s honey range, instigated by Jonathan a few years ago. ‘We’re a British company and we really had to make sure we had a good range of British honeys at the top, which I think we now have,’ he explains. ‘I then wanted to look for world honeys that were fascinating or distinctive.’ As a result he has amassed a wide-ranging selection, collected from places as far apart as Salisbury Plain and Pitcairn Island. Jonathan is happy to startle the tastebuds with his honeys. ‘Not bland is the key,’ he says. ‘I like people to have a reaction, to either love something or loathe it, but not to be indifferent. That’s why I want a lot of variety and look for tastes that are very characteristic. It’s aboutfindingpointsofdifference.Idon’twantpeoplesaying: “Oh, that’s sort of okay.” He recommends lighter honeys, such as English Borage, for breakfast, ‘when the palate is more alive’, before working south of the equator as the day wears on, perhaps with a New Zealand Rainforest honey or a Mexican honey, the latest addition to the Fortnum’s range.

But the real jewel in the crown will always be the honey from Fortnum’s Bees. This year’s spring crop was harvested in May and the second crop will appear in late autumn.

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“We’re a British company and we really had to make sure we had a good range of British honeys at the top, which I think we now have.”

1818

Fortnum & Mason has always prided itself onsupporting small artisanal producers who lavish love and care on everything they make. Whether a hand-raised pork-pie from Lincolnshire, some lovingly stirred chutney from Wiltshire or honey from the bees on our very own roof, everything Fortnum’s sells is the very best of its kind.

So an exhibition of joyous handmade pieces, each withastoryofitsowntotell,fitsinperfectlywithallthat Fortnum’s stands for. Here under one roof can beseen(andbought)someofthemostinspirational,creative work currently being made by crafts people today. Each is linked to the pleasures of food and table. Some cost just a few pounds, some a great deal but all lift the spirits and bring a smile to the face.

In a world that is currently very troubled, where everywhere people are reassessing where true value lies,anexhibitionlikethisisawonderfulreaffirmationof the value of creative innovation. Here before our eyes we can see why the connection between creator and object matter, why it lies at the heart of real quality.

In a world where many of us already have too many things, we are looking for pieces that have meaning. We want things that are truly special, that have not been churned out in their hundreds at the cheapest possible price. We need to have our hearts stirred.

Herewefindthat.Eachpieceissingular.WhetheritisChrisKeenan’sexquisiteCeladonTeaSet (whoseheart wouldn’t lift at being served tea from that lovely teapot?),SianMatthews’delicatesilver“doilies”,AnnaBarlow’s funky Ice Cream Cones or Kenny Menczer’s beautiful wood sculptures, each with a strong and personal statement to make.

There are some 500 hand-crafted pieces made by over 500 different British craftsmen and women and it is wonderful to see that these skills, whether of silversmithing, woodturning, glass-blowing or pot-throwing, are still alive and more then well. It is inspiring to see the teapot, the place, the place mat, the glass, the bowl being endlessly re-invented, their forms and shapes refreshed. It is lovely to find thatwit and humour can turn what could be mundane, everyday things into objects of great beauty that one longs to own.

What I particularly love about this exhibition is that it celebrates true quality and the value of craftsmanship, I like too that it invites one to ponder on the perennial delights of food and dining and why they matter, an underlying Fortnum’s proposition. Here we can all find some lovely pieces, several at very affordableprices, any of which would enliven and enrich the daily ritual of the dinner table. We all need to celebrate more with friends, family and lovers and these pieces make one long to do so.

LuciavanderPost

Casestudy–product

Fortnum & Mason Handmade

An Exhibition of British Craft – Spring/Summer 2010

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Casestudy–product

Fortnum & Mason Coffee

Fortnum’s endeavours to establish direct, long term relationships with our coffee partners to ensure both the economic sustainability for the producer and to encourage quality improvement and re-investment on the farms and in the local communities that they support. In 2010 Fortnum’s has already signed new contracts with coffee producers in India, Brazil, Colombia and Kenya in order to guarantee suchmutually beneficialrelationships and to pay fair price premiums for the pick of the harvest.

Not only is the quality of the coffee of paramount importance, but Fortnum’s will only source coffee from producers or producer groups where there is transparent and documented commitment to the continual improvement of social and environmental conditions on the coffee farms and estates.

As a key example, Fortnum’s has been developing a relationship with the Blackburn Estate in Oldeani, Tanzania which included an appraisal visit to the farm in 2008. Here, fair treatment of the farm workers is a fundamental aspect. One notable difference to the majority of coffee farms is that the coffee pickers on this estate are paid a just wage for picking a maximum

Casestudy–product

RHS Tatton Park

In2010Fortnum&Masonformedanewcompany,Fortnum&MasonEvents,inajointventurewithDo&Co. Weweredelighted towinoutfirst contractwith theRHS for theflower showatTattonPark. Weaimed toproduce an excellent standard of hospitality, sourcing poultry, pork, lamb, cheese and other products locally and from the Tatton Park estate itself.

amount of coffee in a day. This ensures that the pickers are encouraged to pick only the highest quality ripe cherries from the plant. Many pickers around the world are only paid according to the volumes of coffee they are able to pick, regardless of quality.

In terms of environmental protection and habitat conservation, wildlife corridors are maintained (thefarm is located beside the important Ngorongoro Conservation Area, home to elephants and water buffalo) and projects in the past year have involvedthe construction of new water reservoirs to further catch the vital water resources and developing plans to eliminatetheuseofpesticidesandfungicides(toenablethefarmtogrowcertifiedorganiccoffee).

Casestudy–supplier

Clive Christian

In 1872, Queen Victoria uniquely awarded the image of her crown to the highest quality perfumery in the Empire aptly named the Crown Perfumery as a mark of excellence due to the exceptional quality of the perfumes. By the end of the 19th century, Crown had a wide range of scents, available worldwide. Despite its innovations and high reputation, the Crown Perfumery’s success dwindled at the start of World War I, resulting in its closure in the 1930s.

In 1999 British designer Clive Christian was inspired to revive the original perfumery and the world of British luxury perfume with his release of The DefinitiveCollection. Clive Christian Perfumes 1872, X and No.1 The World’s Most Expensive Perfume was created to the same quality of highly concentrated and complex formulas that had earnt the Crown Perfumery its royal and worldwide recognition. The collection truly pays homage to the essence of great British luxury and perfume.

The range was launched exclusively at Fortnum &Mason and since then Clive Christian has become our best selling perfume house with loyal customers visiting the counter from all around the world. Each year Fortnum & Mason hold a conferencewith their suppliers to update them on results and strategy. We also make an award to our Supplier of the Year and this year we were delighted to present the Fashion and Home Supplier of the Year Award to Clive Christian. Clive Christian and Fortnum &Mason enjoy a close relationship between staff at all levels, which exemplifies the long term, sustainableandmutually beneficial relationshipwhichwe aim toachieve with all our suppliers, and demonstrates our commitment to supporting luxury British brands.

Clive Christian has become our best selling perfume house.

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Casestudy–supplier

Farmhouse Biscuits

Farmhouse Biscuits originates from a farm in Barrowford, Lancashire, where a busy farmers wife Dorothy McIvor, had a talent for making delicious biscuits for her family, and began to share her products with friends and neighbours. Demand quickly grew and in 1973 the decision was made to discontinue the farming side of the business and for Dorothy and her husband Phillip to convert the farm buildings for biscuit production. Production grew rapidly but great care has always been taken to ensure that the original family recipes which were handed down from previous generations were maintained. The factory grew over the decades but the same production methods and recipes are still usedtothisday.Fortnum&Masonhasbeenworkingclosely with Dorothy and Phillip for 34 years and now stock a wide range of luxury biscuits, developed with thebuyerexclusivelyforFortnum&Masonunderourown label.All the exclusive recipes use the finest ofingredients such as butter, ground spices, heather honey, eggsandoatmealwithnoartificialadditives,flavouringsor colourings.

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Great care has always been taken to ensure that the original family recipes which were handed down from previous generations were maintained.

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Chapter 4Fortnum & Mason - The Environment

1. Environmental Statement

Fortnum & Mason is committed to our environmental and social responsibilities.

We recognise that operating as a specialist retailer creates carbon emissions and

that this can have a detrimental effect on the environment.

It is the Company’s aim to make all employees aware of the environmental and

social responsibilities required to implement our CSR policy. An in-house committee

has been elected through a volunteer system, which reviews and ensures that all

our policies are upheld and developed in line with legislation and demand.

The Chief Executive is responsible for the corporate social responsibilities within the Company and heads this team. Bi-annual meetings allow the

in-house committee to discuss any issues and review CSR procedures and policies.

This section of our CSR report summarises our current position and our

aspirations for the future. We are aware that this process is still in the early

stages of development and we, as a company, have progress to make. We are

fully aware of the need to engage all our employees in helping us achieve our

environmental aims and we also engage the support and assistance from various

external bodies to help ensure that we meet our targets.

The company is committed to complying with relevant environmental legislation

and regulations and we are working hard on the aspects that affect our current

environmental policy.

This policy has been posted onto the internal notice boards and on our intranet site.

March 2011

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2. Environmental PolicyThe Company is conscious of its position and role within the community and is committed to continual improvement of our environmental performance. In meeting this objective, the Company’s environmental policy is:

• To satisfy all appropriate legislation and conform togood industry practice.

• Requiresfullconsiderationtobegivento: o Responsible use of raw materials and conservation

of resources o Efficientuseofenergyinalloperations o Use of packaging materials and processes which

minimise demands on non-renewable resources o Minimising emissions into the air, water courses or

as waste o The environmental impact of new capital investments

• Encourages active participation of employees inaddressing environmental issues.

• Seeksassurancesfromsuppliersonenvironmentalissues.

• Subject to review, incorporating new objectives as appropriate.

We do all we can to reduce the indirect effects of our operations upon our surrounding environment. It is well known that greenhouse gases such as CO2 and methane released into the atmosphere by human activity cause climate changes and the effects of this changing climate can be seen already, temperatures and sea levels are rising as ice and snow cover decline, with potentially catastrophic consequences for the natural world and society.

The largest and fastest growing pressures on the environment come from areas such as household energy and water consumption, food consumption, transport and tourism. We are now focussing on the whole life cycle of goods, services and materials, including impacts outside the UK.

3. Carbon Management PolicyFortnum&Masonacknowledges that itsactivities impactupon the environment and contribute to climate change. Therefore, it is committed to reducing carbon dioxide and other greenhouse gas emissions and thus its impact on climate change.

Fortnum&Masonwantstobealeaderineffortstoaddressclimate change, and sees this as an excellent opportunity to promote its environmental credentials.

Inmanagingcarbon,Fortnum&Masonwill:-• Annuallyassessitsorganisationalcarbonfootprint• Identify opportunities to reduce CO2 and other

greenhouse gas emissions by: o Reducing the need for activities o Makingactivitiesmoreefficient o Making activities greener and cleaner

• Consider offsetting our unavoidable emissions usinghigh quality offsetting projects.

• Set targets to reduce emissions and monitor againstbenchmarks.

• Allocateresponsibilityforachievingthesepolicyaims.

• Reviewtargetsandthispolicyregularly.

• Involveandengagestaffinenvironmentalactivities.

• Promotetheseachievementstocustomers.

By committing to this policy, Fortnum &Mason aims toposition itself as a leader in addressing climate change. The Company sees competitive advantage and new business opportunities to be gained from continually improving environmental performance. The action plan aims to reduce wastage, improve efficiency and save money, soembedding good environmental management into core business activities.

a. EnergyEfficiency

Activities currently undertaken to reduce energy include:• BuildingManagementSystem(BMS)tocontrolheating

and cooling.• LightingManagement System (LMS) to control store

lighting times.• Passive Inferred (PIR) sensors in washroom and

storeroom facilities.• Externaloptimisers.• IntroductionoflowvoltageandLEDlighting.

To further develop our environmental work, we have recently appointed consultants Carbon Clear to assist us in further formalising our carbon management processes.

We have calculated our carbon footprint for examining Scope 1 and Scope 2 emission under Greenhouse Gas Protocol, gas electricity, other fuels, also water.

For the year to June 2010 our footprint amounted to 3,347 tonnes of CO2e, with 81% arising from electricity consumption at the Piccadilly store. A summary of the footprint is shown below:

Units Tonnes of CO2e

Electricity - Piccadilly kWh 4,961,467 2,700

Gas–Piccadilly kWh 2,769,656 565

Water–Piccadilly M3 23,847 23

Electricity–Ely kWh 88,345.95 48

Calor Gas - Ely Litres 6,686 10

TotalFootprint–TonnesofCO2e 3,347

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In the lead up to our tercentenary, the building at Piccadilly underwentmajor refurbishmentwith significantconstruction work over a long period. During the construction period our carbon emissions increased and so, to gauge a more realistic assessment of our carbon reduction, we have compared our emissions in 2009/10 to thepre-refurbishmentfigurein2004/5.

Counting emissions from Piccadilly and our warehouse in Ely, emissions show a reduction of 9% over the period, with a 1% reduction in electricity, a 36% reduction in gas despite the increased size of the store in Piccadilly and the introduction of air cooling. Water usage has unfortunately increased by 21% due to the introduction of two new restaurants and a switch from using bottled water to tap water. Reducing our water usage will be a key focus for us in 2010/11.

Our target is to reduce our overall carbon emissions by a further 5% by the end of 2012.

We are currently preparing our Carbon Management Action Plan following a detailed energy audit of the Piccadilly store,whichwill include specific activities, tasksand timescales for achieving our policy aims. Activities may include behavioural, operational and equipment changes and we will use the carbon hierarchy of:• Reducetheneedforactivities• Makeactivitiesmoreefficient• Makeactivitiesgreenerandcleaner

Activities include control and use of energy efficientlighting, electrical equipment and heating/cooling systems; implement a“switch itoff ”policy, ensureefficientuseofplant and kitchen equipment, reduce wastage, build a new energyefficientwarehouse.

b. Wastemanagement

The store and warehouse produce approximately 378 kilos of waste each year. Our objective is zero waste to land-fillby theendof2010. Atpresent100%ofwaste fromthe Piccadilly store is sent for recycling or reuse. Waste from our warehouse, excluding cardboard currently goes tolandfill,althoughwearecurrentlyfinalizingarrangementsto send all waste from the warehouse facility to a Materials RecoveryFacility(MRF)andfulfilourobjective.

c. Packaging

In2006/7Fortnum&Masoncommissionedareviewofallpackaging through Envirowise.

The project identified the opportunity to reduce ourcarbon footprint relating to packaging by 145 tonnes per year and to prevent 72 tonnes of packaging waste being discarded by customers.

We have been steadily working through the recommendations in the report and our main activities include the following:-

• Introducingairfillpouchesinplaceofpolystyreneinfillfor mail order packaging.

• Introducingmouldedpulpboxesinplaceofpolystyreneto transport wine for mail order, saving 3 tonnes of CO2 per annum.

• Reducingtheweightofplasticcarrierbagsby25%andreplacing the original carrier bag with bags which are 100% biodegradable.

• Introducing a “bag for life”. Since its introduction inOctober 2009 we have sold 27,000 bags for life. This has helped to reduce our plastic bag usage by 53,000 bags.

• Using 100% biodegradable fillings for our hampers,which is a wheat based product called Greenfill.Greenfillissuitableforcompostingandalsodissolvesinwater.

• Introducing eco friendly insulated packaging, usingsheep’s wool for transporting chilled deliveries to customers homes.

We have received the environment agency’s latest packagingreportwhichstatesthatFortnum&Masonarecomplying with the Regulations and are taking adequate steps to discharge recovery and recycling obligations.

d. Transport

We do not own any vehicles directly but use third party logistics companies for all our goods management and deliveries to customers.

Our main courier is Parcelforce who have reduced their GHGemissions(tonnes)by20%overthelast5years.

2004 -2005

2005 -2006

2006 -2007

2007 -2008

2008 -2009

Parcelfoce Worldwide GHG emissions (tonnes)

118,101 107,323 101,528 101,086 96,029

Parcelforce have:• Rolledout1100MercedesEco-Startvehicles–which

cut out when stationary as part of their focus on reducingtheemissionsgenerated.Theirentirefleetof2000 plus vans is regularly renewed to ensure they have themosteconomicalandefficientvehiclesontheroad.

• Requireddriverstoundertakedailyvehiclechecksandvehicles undergo maintenance inspections regularly to ensuretheirefficiencyandsafety.

• Supported drivers with data and varying levels oftrainingsoastohelpthemincreasetheirfuelefficiencyand reduce carbon emissions.

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• Incorporatedalternative fuel andenergyvehicles intotheirfleet.Theycurrentlyhavesixdifferentvehicletypesundergoing tests. These include two electric vehicles, two hybrid vehicles and two “teardrop” trailers. They are investigating viable options for alternative fuels for thefutureoftheirfleet.

For local deliveries in London we use Cyclone who make deliveries by electric vehicle and bicycle.

e. SupplyChain

Our supply chain strategy includes the backloading of vehicles, using the return trip of vehicles after they have made their deliveries. The strategy has been particularly successful in our delivery of our wicker baskets.

Empty vans and lorries account for 7.2% of the UK’s total annualcarbonfootprint.(Source:Lowcarboneconomy.com)

Our wicker supplier uses a transport company based in Ely, just 6miles from the Fortnum&Masonwarehouse.All loads from them toEly are a return loadfillingwhatotherwise would be an empty lorry. The mileage of this trip is 220 miles. In a 12 month period from July 2009 to June 2010 this trip was made 54 times, a total mileage of 11880 miles. The transport company averages 9 miles to the gallon (source: Halls), this equates to 1.97miles perlitre, 11880 miles equals 6030 litres. This equates to saving 15914kg of CO2 per annum.

f. Construction

In 2011 we are planning to build a new warehouse in Cambridgeshire.Thespecification for thewarehouse fullytakes environmental impact into account and includes the following:

InsulationTheunitwill bebuiltusingahigh specificationof80mmthickness insulatedcladdingused forroofingwitha2.5uvalue.Roofinglightpanelswillbedoubleglazedandmeetthe same 2.5 u value. Theunitwill bebuiltusingahigh specificationof80mmthickness insulated cladding used for outer walling with a 2.5 u value.

OfficeHeatingThe heating system will utilise as much energy as possible fromanairsourceheatpumpsystem,significantlyreducingtheelectricityrequirementsforofficeheating.

GlazingTheofficewindowswill bedouble glazedunits featuringlowe-glassandgasfillingwhichwillmeetrequirementsofBS5713&BS6262.All glasswill be tinted for extra heatreflectivity.

ElectricityResearch is underway into powering a neighbouring fishfarm with a wind turbine, which could also be utilised by our site.

RainCollectionWe are planning to introduce a rain water collection system that can be used for cleaning the warehouse, toilet facilities etc.

LandscapingThere will be extensive planning of trees, shrubs and plants around the new building.

LightingWe will install low energy lights, equipped with sensor switches to ensure lights are only used where and when required. This will also significantly reduce electricityconsumption for the site.

SolarPanelsConsideration is being given to the use of solar panels to generate electricity if the wind turbine mentioned above does not go ahead.

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Casestudy–Ecofriendlyproduct

The Wool Packaging Company

When professional packaging designer Angela Morris was asked by the National Trust to help its tenant farmers by finding a more environmentally friendlymeans of keeping their homes deliveries chilled during transit, her answer was nothing short of revolutionary.

Angela’s idea was to use sheep’s wool, an abundant and sustainablenaturalresource–thereareover22millionshearablesheepintheUK.Sheidentifiedthatsheep’swoolisa‘smartfibre’withhygroscopicpropertiesthatabsorb and release moisture from the air to create consistent temperatures. Following detailed research, Morris developed woolcool®, a system of eco-friendly insulated packaging that is now marketed by the Wool Packaging Company. Not only does it compete on cost, but woolcool® keeps chilled contents below 5 (degreesC) for at least 24 hours, performing betterthan equivalent polystyrene packaging.

The environmental benefits are manifold. Theinnovation comes at a time when sheep farmers have seen the price of wool plummet because of man-made fibresandmuchwoolwaswasted.Woolcool® creates a new market for these farmers and can use evens the coarsestoffleeces.Theprocessingisminimal,withthewool being hand-pulled and washed without extreme temperatures or chemical treatments. There are even some useful by-products: the sludge produced from washing is used for natural fertilizers or slug pellets; and natural lanolin is separated out for use in cosmetics and pharmaceuticals. Through existing suppliers switching to woolcool®, an estimated 65 tonnes of polystyrene of polyethylene is estimated to have been taken out of the chilled food delivery sector in 2009. Much of that wastewouldhavegoneintolandfill.Eventhefootprintfrom delivering woolcool® represents a dramatic improvement: since it is flat-packed, three articulated

The system of eco-friendly insulated packaging is nothing short of revolutionary.

lorries can deliver 10,000 units of woolcool® in comparison to 25 vehicles for equivalent polystyrene packaging.

Shropshire-based the Wool Packaging Company has become the only business providing sheep’s wool packaging on a commercial scale.

Fortnum&MasonintroducedtheproductinOctober2010 and has been delighted with the results achieved.

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Chapter 5Fortnum & Mason - The Community

1. Charitable Giving

Fortnum & Mason’s holding company is Wittington Investments Ltd,

which is 79% owned by the Garfield Weston Foundation. In 2009 The

Foundation supported 1518 charitable appeals, with the total cash

donation of £37.6m, £9.7m of which was for charities based in London.

In 2011, Fortnum & Mason is hoping to return to profit and will then begin

making contributions to the Foundation.

In the meanwhile we recognise the importance of supporting charities in

the local community and we work in a variety of ways to support local

and national charities.

The Princes Trust is a charity which helps to change young lives.

It gives practical and financial support, developing key workplace skills

such as confidence and motivation. It works with 14-30 year olds who

have struggled at school, have been in care, are long term unemployed or

have been in trouble with the law.

The Prince’s Trust helps more than 40,000 such disadvantaged young

people every year, giving them they confidence and skills to get a job.

In 2009, more than 80% of young people who went on The Prince’s Trust

programmes moved into work, education or training.

Fortnum & Mason will be offering work placements in retail, hospitality,

and warehousing, will be mentoring young people on the programme and

is aiming to raise £100,000 through staff involvement over the 3 years.

2. Volunteering

All staff are allowed to take up to 3 days to do voluntary workwhilebeingpaidbyFortnum&Mason.Thiswillusuallybe in association with our nominated charity, which may, for example, involve visiting schools to help with reading.

3. Local Organisations

Fortnum&Masonrecognise thevalueofparticipating inthe community by being members of a variety of local organisations.

We are currently supporting the St James's Conservation Trust in their work to preserve the character and heritage of St James's. We are also members of London First, The Jermyn Street Association and the New West End Company, and we actively engage in and support activities to promote the West End as the world’s top shopping destination.

4. The Arts

We work with a number of Arts organisations to promote the arts through commercial activity, these currently include TheRoyalAcademyofArt,TheNationalGallery,TheV&A,Sadler's Wells and Glyndebourne.

5. Piccadilly Project

We have been active leaders of the project to restore PiccadillyandStJames'stotwowaytrafficandtoimprovethe historic environment by removing street clutter and improving paving and lighting etc. We have donated £250,000 to help achieve the best quality of design. The work will be completed in time for the celebrations of the Queen’s Diamond Jubilee and the London Olympics 2012 and are working closely with other local businesses with a view to establishing a Business Improvement District for Piccadilly.

Piccadilly is a world famous destination of great historic interest and character, yet since the 1960s has been spoilt by the one-way gyratory system and a lack of care and attention to the environment.

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Casestudy

Piccadilly Project

In 2008 Fortnum & Mason met with other localbusinesses, organisations and residents to explore what could be done to improve the environment of Piccadilly and St James’s. Piccadilly is a world famous destination of great historic interest and character, yet since the 1960s has been spoilt by the one-way gyratory system and a lack of care and attention to the environment. The views of other local stake holders was sought in a series of community meetings and it quickly became apparent that there was unanimous support for making improvements, including the re-introduction of two-waytraffic.InitialideasweresupportedbytheStJamesConservation Trust, local residents, the Crown Estate, Westminster City Council and the Mayor of London. Funds were successfully secured from Transport for London, Westminster City Council, The Crown Estate and Fortnum & Mason to make the desiredamendments. The work will be completed in time for the celebrations of The Queen's Diamond Jubilee and the London Olympics in 2012. Visuals courtesy of Atkins Public Realm/Design Hive/

The Crown Estate

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Fortnum&Masondoesnotdiscriminate in employmentopportunities or practices on the basis on any characteristic protectedbylaw.Fortnum&Masonexpectsallemployees,of whatever grade or authority, to abide by and adhere to this principle.

Fortnum&Masonwillmakereasonableaccommodationsforqualifiedindividualswithknowndisabilities.Employeeswith questions or concerns about any type of discrimination in the workplace are encouraged to bring these issues to the attention of their immediate supervisor or the HR Department. Employees can raise concerns and make reports without fear of reprisal.

Fortnum & Mason commits itself to the immediateinvestigation of any claims of discrimination on the above grounds and, where such is found to be the case, a requirement that the practice cease forthwith and (ifappropriate)thatrestitutionismadefordamageorloss.

Any employee found guilty of discrimination will be instructed to stop the offending behaviour immediately and will be dealt with under the disciplinary procedure. Unless assurances of future non-discriminatory actions are forthcoming, an employee repeating any act of discrimination may be dismissed.

This policy governs all aspects of employment, including selection, job assignment, compensation, discipline, termination,andaccesstobenefitsandtraining.

The Board recognises that its employees, colleagues, suppliers and associated workers are the most important asset of the Company. We are committed to equal opportunities and are committed to ensuring that no employee, colleague, supplier, applicant or associated worker is treated less favourably on the grounds of race, religion, gender, ethnic origin, disability or sexual orientation. All employees/colleagues/suppliers and associates of Fortnum&Masonmustbedealtwithequally,fairly,ethicallyand with consideration for their self-esteem.

No-onewillbediscriminatedagainstbyFortnum&Masonon any of the following grounds:

SexDiscrimination: Employees at Fortnum&Mason areprotected from discrimination at work on grounds of their gender. As at July 2010 of our Senior Management team of 24, 12 are women, and on our main Board of 7, 4 are women.

Race Discrimination: Fortnum & Mason protects allworkers from discrimination at work on grounds of colour, nationality(includingcitizenship),ethnicornationalorigins.As at July 2010 65% of our staff are British, 28% European and 5% are from the rest of the world.

DisabilityDiscrimination:Workers at Fortnum&Masonwho have a disability are protected from discrimination at work.

Adisability isdefinedasanymentalorphysicalconditionsuch as impaired mobility, manual dexterity, hearing, memory or the ability to learn or understand which may affect that person’s ability to carry out day-to-day activities. We are fully compliant with all aspects of the Disability Discrimination Act.

Religious or Belief Discrimination: Fortnum & Masonprotects workers from discrimination on grounds of their religion or beliefs.

Sexual Orientation Discrimination: Fortnum & Masonprotects workers from discrimination on grounds of their sexual orientation.

GenderReassignmentDiscrimination:Fortnum&Masonprotects workers from discrimination at work if they are intending to undergo the medical process of gender reassignment, are undergoing that process, or have undergone that process in the past.

AgeDiscrimination:Fortnum&Masoniscommittedtotheprinciple of non-discrimination on grounds of age. In addition to ensuring that we do not discriminate on grounds of age inourrecruitmentorselectionpolicies,wehaveaflexibleretirement scheme giving individual employees as much choice as possible over when they want to retire, subject to the needs of the business. Many of our staff choose to stay with the Company after retirement age is reached.

Chapter 6Fortnum & Mason – Our People

1. Equal Opportunities Policy

In order to provide equal employment and advancement opportunities

to all staff, employment decisions at Fortnum & Mason are based on

merit, qualifications, and abilities.

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3. Staff EngagementWe believe that it is critical to engage staff by ensuring that they are fully informed about the business and that they have the opportunity to participate in decision making.

To this end we publish a daily newsletter to all our staff updating them on our trading performance and relevant day to day issues.Wealsohavenoticeboardsoneachfloortoconveyinformationtostaff.

We hold a Managing Director’s Committee Meeting made up of members of staff representing different areas of the business. This Committee allows its members to talk directly to the Managing Director about any current issues in their area. The Managing Director also holds an annual forum with all staff to communicate strategy and developments within Fortnum&Mason.Thisforumisinteractiveandgivesallstafftheopportunityforaquestionandanswersessionaswellas an opportunity to meet the Board. Twice monthly the Board meets with the Management Team and monthly with the Team Leaders to discuss sales and business developments. This is then communicated to all staff via departmental weekly half hour training sessions.

We also have a CSR Committee made up of management and non-management who monitor and review our performance againstourpolicyandtargets,reportingtheirfindingstotheBoard.

Similarly,ourHealthandSafetyCommitteemonitorsallaspectsofHealthandSafety,reportingfindingsaspartofRiskManagement at the monthly Board meetings.

The Charities Committee is made up of management and non-management and is currently working with The Prince’s Trust to raise £100,000 to help underprivileged young people.

2. Skills and TrainingThe Company is committed to ensuring a culture of trust and respect, working in an environment which encourages teamwork, honesty and an openness to express opinion, with staff and our customers both internally and externally.

Staff are supported and encouraged to develop their own skill set both to enhance their performance and to ensure that theygaingreaterself-confidenceandawareness.Coachinganddevelopmentareofferedtoallourstaff.

Product knowledge training is carried out by the relevant manager to ensure the understanding of the sales and merchandising teams on matters such as food safety, quality, taste, shelf life and storage.

a. Fortnum&MasonAcademies

We have devoted a great deal of time and effort to developingtheFortnum&MasonAcademiesinFineFood,Fashion and Home, Hospitality and Customer Service. The purpose of the Academies is to educate our staff about what they are selling and how to sell it, with a view to offering our customers the best possible service

The Academies are split up into individual modules, each of which has its own handbook. For example the handbook based on tea details how tea is planted, harvested, processed, blended and exported. For general knowledge there are details of which countries produce our tea; and to top this off, of course, how to make the perfect cup of tea.

b. NationalVocationalQualifications

Many employees have achieved NVQ qualifications atFortnum & Mason.We have been involved in NVQ’sin Retailing, Business Administration, Computer Skills, Marketing and Management and Hospitality.

c. Students

For many years we have been running various programmes to offer students the work experience necessary for a head start in building their future. For high school students we offer short work experience opportunities, allowing an insight into what working life involves.

For undergraduate students, we offer an Industrial Placement on our Management Trainee programme. This programme is for students within the U.K on a sandwich degree course (which entails one year of an industrialplacement).Theyhaveanopportunitytoworkindifferentdepartments enabling them to learn and develop varied skills throughout the store. Some students enjoy their time so much that they go on to join us as an employee after they have graduated.

We also offer an International Industrial Placement. Students from abroad join us on an industrial placement and are moved around the store, carrying out various tasks and reports.

• Remuneration– all staff are paid a fair wage for the work they do which is regularly monitored against the general market rate. In addition, pay is performance related, so the highest performing members of staff are the highest earners within their type of work. A bonus scheme for all staff will be introduced once the Companyisinprofit.

• HealthPlan– a private health insurance plan is offered to all staff through Healthsure, for a modest contribution.

• Interestfreetravelloans are offered to all staff.

• StaffDiscount of up to 40% is offered on staff purchases in the store.

• Reward Gateway – all staff have access to Reward Gateway which offers benefits and cash back onproducts and services across 1000 retailers.

• ChildcareVouchers– we work with Busy Bees to help staff to claim childcare vouchers.

• Long Service Awards – staff who have worked at Fortnum&Masonfor10,15,20or25yearsreceiveacash award and an invitation to dine with a friend.

• WeddingsandCivilPartnerships– staff receive a paid day off and a gift to the value of £100.

• Staff Shop – staff can purchase food and other products which might otherwise be wasted at a heavily discounted rate.

• Bonus Scheme – in 2010 a bonus scheme was introduced for all staff based on company performance, andthefirstbonuswaspaidtothestaffinJanuary2011for reaching their Christmas targets.

Casestudy

Hannah Collins

Hannah was born in Somerset in November, 1982. She was raised in the area and completed her education locally, accruing 11 GCSE’s. During this time Hannah firstdevelopedherpassionfortheretail industry,andbegan work experience as a buyer with the women’s fashion company New Look, during her summer holidays.

Following this new found enthusiasm she went on to acquire 5 A-levels comprising Business Studies, Psychology, Geography, German and Sociology. Whilst studying at college, keen to enhance her career path and expand on retail knowledge accrued at New Look, Hannah joined Clarks shoes where she became aweekendchildren’sshoefitter.Theearlyexperienceof customer service during the ‘back to school’ period became an exciting rush.

After progressing to Children’s Weekend Supervisor, Hannah then transferred branches so she could continue her employment with Clarks whilst also furthering her education with a retail degree. She subsequently moved to Guildford, where she completed a BA Honours in RetailManagement(2005)attheUniversityofSurrey.

4. Benefits and Rewards

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The Retail Management degree included a year in industry, andthis iswhenHannahfirstencounteredFortnum&Mason. Throughout her university placement she spent time assisting various departments within the company including the sales floor, Warehousing and Logisticsand Customer Service. Alongside her valuable work experience,during this timeFortnum&MasonhelpedHannah gain her NVQ Level 3 in Mentor Managing.

After the completion of her degree Hannah joined Fortnum&Masonas aBuyer’sClerk in theGrocerydepartment. During this period, she completed the Fortnum & Mason food academy which increasedher depth of knowledge into Fortnum’s unique range of produce.

In 2005 it was announced that Fortnum & Masonwould be undergoing a £30million refurbishment, and Hannah was enlisted to join the project team that November. Her key project management role was to liaise with fellow colleagues and customers during the development period.

Upon completion of ‘Project Piccadilly’ Hannah’s next step in October 2007 saw her assist in the implementationofFortnum&Mason’sfirst3rdPartycall centre in Glasgow, which processes telephone orders. This meant relocation for three months to deliver training and support to the new team. Following a successful launch, Hannah was then promoted to Team Leader of the Customer Order department in

June 2008. Hannah became a key individual in managing of one of the busiest departments through the 2008 Christmas trading period. Following this success, in 2009, Hannah was promoted to Customer Relations Manager. The role incorporates management all our telephony departments; customer services, telephone ordering and switchboard. Furthermore, Hannah is now also a key member in the customer service academy, which aims to provide outstanding customer service training to all employees.

Alongside her role, Hannah is an active member of several of Fortnum & Mason’s additional activities.These include co-managing the Charity Committee firewardendutyandasaSt John’sAmbulances‘FirstAider at work’, for which she undergoes regular training. Hannah has undertaken many sponsored events for various charities raising a sum of £890 to date. These included completing a 17 mile night hike around central London for Maggie’s Charity twice, a two mile swimathon for CLIC Sargent and organising a coffeemorningfortheemployeesatFortnum&Mason.Finally, Hannah is also playing an active role in the futuredevelopmentofFortnum&Masonthroughherparticipation in the implementation of a new customer ordering system, due to launch store-wide in the new year.

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After the completion of her degree Hannah joined Fortnum & Mason as a Buyer’s Clerk in the Grocery department. During this period, she completed the Fortnum & Mason food academy which increased her depth of knowledge into Fortnum’s unique range of produce.

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2. Value

Although we are a luxury retailer and our pricing structure reflectsourbrandpositioningweaimtochargefairpricesfor the quality of product we are providing. Our margins are set at a fair level and we constantly monitor our competitors’ prices, so that we are charging only a modest premium above high street prices for proprietary brands.

3. Quality

As outlined in our buying pillars, we always seek out the highest possible quality of product for our discerning customers. We work directly with our suppliers, often developing recipes together to achieve the highest quality possible.We employ a qualified food technologist whomonitors quality control with all our suppliers.

4. Communication and Enagagement

We keep our customers informed of development and activities through email, direct mail, news and stories on our website and through electronic information boards in the store. In addition we commission regular exit surveys tofindoutwhatourcustomersthinkofus,andholdfocusgroups to talk through issues with customers in more depth. In 2010/11 we are introducing a new Customer Relationship Management system which will give us 360 degree view of our customers’ activities across all channels, store, restaurants, telephone and website enabling us to target our communications more effectively.

5. Accessibility

Since completing the refurbishment of the store we fully comply with the Equalities Act and are able to satisfy the needs of all our customers, whether they need assistance due to hearing, sight or mobility issues.

Chapter 7Fortnum & Mason – Our Customers

1. Service

Fortnum & Mason aim to provide excellent service through whichever

channel our customers contact us – store, telephone or website.

We train our staff through the Academies to be knowledgeable, polite,

attentive, friendly and helpful. We aim to provide ‘old fashioned’ service

backed up by modern systems and processes.

On those occasions where something goes wrong we aim to provide and

promote a generous response in order to turn a dissatisfied customer

into an advocate of Fortnum & Mason.

We undertake regular ‘mystery shopping’ to monitor and help us to

improve out standard of service.

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