The Groceries Code Adjudicator (GCA) ruled that Morrisons had broken the code by indirectly requiring suppliers to pay lump sums that were not provided for in the relevant supply agreement. Some of these requirements were retrospective.
This week, Morrisons accepted that 19 of the requests made had not been related to the relevant supply agreements and were therefore in breach of the Code.
Supermarket chain responded immediately
The GCA acknowledged that the supermarket chain had responded immediately when alerted to the issue and it had conducted an extensive internal investigation.
This was not the first time the supermarket has been found in breach of the code. In June 2014 it was found to be overcharging 67 suppliers.
David Potts, chief executive of Morrisons, said this week: “These events happened a year ago and since then much has been achieved to ensure they don’t happen again. However, we are sorry they happened in the first place.
“As soon as we were made aware of these requests to suppliers, we conducted a detailed internal investigation and co-operated fully with the GCA.”
Changed the way it works with suppliers
“Since then, we have completely changed the way we work with suppliers. I have brought in a new management team who have modernised and simplified all of our buying practices. We have also reorganised and retrained our buying team.
“All of our new ways of working with suppliers have been shared with the adjudicator.”
The GCA Christine Tacon said she had been assured that additional training, more robust internal processes and increased audits were now in place.
”This was a relatively small-scale incident confined to a short trading period, which was rapidly investigated and corrected,” said Tacon. ”No supplier complained to Morrisons Supermarkets about the incident and all suppliers have continuing trading arrangements with the retailer.”
Meanwhile, read in the box below about other big food firms which were forced to apologise to their suppliers.
Other firms who apologised to suppliers
In January, Tesco boss Dave Lewis was forced to apologise for the second time to suppliers after the GCA ruled Britain’s biggest retailer had breached the GSCOP in three areas.
The GCA ruled that Tesco had made unilateral deductions from suppliers, taken too long to pay money due to suppliers and, in some cases, intentionally delayed payment.
Lewis said: “In 2014 we undertook a review into certain historic practices, which were both unsustainable and harmful to out suppliers. We shared these practices with the adjudicator and publically apologised. Today, I would like to apologise again.”
In June 2015 Premier Foods’s boss Gavin Darby admitted the business had “made mistakes” in some of its Invest for Growth plan.
Premier Foods had sent letters to suppliers informing them they would have to make an investment payment to work with the company.