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GSCOP Adjudicator targets Supermarket “forensic investigations”

In a move that will be welcomed by all who supply wine to the UK’s largest Supermarkets, the GSCOP Adjudicator has announced she will crack down on the practice of retailers hitting suppliers with alleged claims relating to promotions going back as long as six years.

Many suppliers have complained about supermarkets using so-called “audit teams” – often external and working on a “no-win, no fee“ basis –  to trawl through their books looking for discrepancies between volumes taken into account in calculating promotional discounts due and volumes actually sold.  If the “auditors” get lucky – or think they have – the supplier gets an invoice from the supermarket for what is allegedly due.  These claims often go back years, and can be difficult for suppliers to verify. But unless the supplier is able to challenge the invoice, and go back smartly with chapter and verse, the supermarket simply deducts payment from what it owes the supplier.  And we’re not talking about small amounts – some of these claims have been for hundreds of thousands of pounds.

While the Adjudicator may be able to persuade the supermarkets to change their ways, it may take time.  In the meantime, suppliers should consider self-help measures:

  • requesting a long-stop cut-off point for possible claims, eg 12 months after the end of any agreed promotion; and
  • asking retailers to agree not to set off any historic claim against payments currently due unless and until both the validity and the amount of the claim are established.