Groceries Code Adjudicator finds supermarket group breached code of practice
A watchdog has called for “major changes” at Co-op after finding the UK supermarket group treated suppliers unfairly in relation to product delistings and charges.
The Groceries Code Adjudicator, which oversees the relationship between big supermarket groups and their suppliers, on Monday released the findings of a year long investigation, ruling that Co-op had breached the Groceries Supply Code of Practice by failing to provide reasonable notice to suppliers when it delisted products and introduced new charges.
“The practices and behaviours described in my report were widespread. Systems, processes, business practices and the ability of different parts of the retailer to affect suppliers’ risks and costs of trading with the company all contributed to Co-op breaking the Code. At the core there was inadequate governance to oversee and manage Code compliance,” said Christine Tacon, the GCA.
Ms Tacon found that Co-op had delisted suppliers with no notice or short, fixed notice periods that she said “were not reasonable in the circumstances”.
It also introduced charges for depot quality control and benchmarking that she said “caused particular difficulties for suppliers with fixed-cost contracts as they would not be able to amend their cost prices to reflect the increased cost incurred when Co-op applied the charges.”
“The clear conclusion is that Co-op needs to take a very different approach to Code compliance. I have made robust recommendations for urgent action and I will be helping the retailer change its approach by monitoring closely how they implement those recommendations,” Ms Tacon said.