Groceries code boss claims progress but needs tip offs

By Michael Stones

- Last updated on GMT

Groceries code boss Christine Tacon claimed significant progress had been made
Groceries code boss Christine Tacon claimed significant progress had been made

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Groceries Code boss Christine Tacon claims significant progress had been made in enforcing the Groceries Supply Code of Practice but urged suppliers to share information more freely.

The UK’s top 10 supermarkets had all acted on issues raised by the Groceries Code Adjudicator (GCA) and suppliers were seeing the benefit, Tacon told the GCA’s annual conference today (June 27).

Tacon said the scale of the success was revealed by a sector-wide survey, which showed a further fall in the number of suppliers experiencing Groceries Code-related problems.

The YouGov survey, commissioned by the GCA, revealed that 62% of direct suppliers said they had experienced a problem in the past year – compared with 70% in 2015 and 79% in 2014. 

The top three supermarkets that complied ‘consistently well’ and ‘mostly’ with the code during the previous 12 months were said to be Aldi, Sainsbury and Lidl.

Top three supermarkets

Most retailers improved their behaviour in the past year, revealed the survey.

Supermarket giant Tesco was identified as the top performer, with 65% of those supplying the retailer reporting that its practices had improved.

Only 5% of its suppliers complained that its treatment of suppliers had worsened. 

The top problem revealed in the survey was incorrect deductions from suppliers’ invoices with or without notice. That was reported by nearly one third (30%) of respondents.

The next two biggest complaints focused on excessive retailer charges for artwork/design, mentioned by 28% of those surveyed and no compensation/incurring penalty charges for inaccurate forecasting reported by 22%.

Commenting on the results, Tacon said: “All the regulated retailers have acted on the issues I have raised over the past year and there have been some excellent examples of changes in retailer practice.

“I am delighted that direct suppliers are seeing the impact of real change for their businesses. For the second year running the number of suppliers reporting Code-related issues has fallen.”

New list of top five topics

Tacon has used the survey findings and other information to develop a new list of top five topics on which to focus in the coming year.

The new list was: charges for artwork and design services, delay in payments, margin maintenance, pay to stay arrangements and payments for better positioning.

The Groceries Code boss also launched a formal consultation into payments for better positioning of goods.

Suppliers’ top three complaints

  1. Incorrect deductions from suppliers’ invoices
  2. Excessive retailer charges for artwork/design
  3. No compensation/incurring penalty charges for inaccurate forecasting 

“During my investigation into Tesco I found areas of concern about the issue of payments for better positioning or increased share of shelf-space,”​ said Tacon.

“I came across instances where a Tesco request for investment resulted in the supplier asking for share of shelf-space commitments, product placement near competitors and exclusivity.

Tacon reported seeing examples of significant payments for category captaincy and range reviews where suppliers felt that non payment would adversely affect the positioning on their products on-shelf.

“Such arrangements appear to have the potential to have an adverse effect on competition through retailer acceptance of large sums of money from suppliers in exchange for better positioning or increased shelf-space,” she said.

The consultation is open for 12 weeks until September 19 and the responses will help the adjudicator clarify how paragraph 12 of the code relating to payments for better positioning should be interpreted.

One disappointment

One disappointment for the adjudicator was no change in the proportion of suppliers prepared to bring information to the GCA.

Tacon was disappointed that the number of suppliers reporting a problem to her remained “stubbornly on 47% – with more than half giving the reason as fear of their relations with a retailer being damaged”.​ 

That was despite the publicity around the Tesco investigation and what Tacon termed a clear demonstration that she could carry out “a complex investigation with significant findings and benefits for suppliers with no identities revealed”.

The Groceries code boss pledged to redouble her efforts to over come the “fear factor” in a bid to persuade suppliers to share information more freely.

The survey results were released at the GCA’s third annual conference held at Church House in London under the theme Building Fairness and Securing Change.

Last week, Morrisons apologised​ for breaches of the code last year.

Groceries Code boss: new top five priorities

  1. Charges for artwork and design services
  2. Delay in payments
  3. Margin maintenance
  4. Pay to stay arrangements
  5. Payments for better positioning

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