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UK Grocery Supplies Code of Practice – the Adjudicator flexes her muscles

The Groceries Supply Code of Practice 2010 (GSCOP) was supposed to help achieve a more level playing field for those who supply the UK’s largest supermarkets.  But so far it has had little effect. The “climate of fear” has persisted. Few suppliers have had the nerve to raise possible breaches of the Code with the likes of Tesco and the other “Designated Retailers”.  That may be about to change. The Adjudicator appointed to administer the Code in 2013 is now beginning to flex her muscles.  For example, she has condemned Tesco’s practice of asking suppliers to pay a premium for the best shelf positioning.  And now she has published Guidance on how she will operate.

Adjudicator’s Guidance – key points

  • The Adjudicator can investigate any alleged breach of the Code which occurred after 25 June 2013
  • She cannot deal with individual cases other than by arbitration, but has a wide range of powers to make Retailers change their behaviour
  • Regulations due in April 2014 will enable her to impose financial penalties on defaulting Retailers
  • Although suppliers are encouraged to raise Code issues with the relevant Retailer’s Compliance Officer, to seek legal advice, and to consider using the dispute resolution procedures provided by the Code, these are not preconditions to raising a complaint with the Adjudicator or providing information to her
  • The Adjudicator has a statutory duty to keep information confidential.  In particular, information which identifies a supplier will be treated as confidential unless that supplier waives confidentiality.
  • There is a suggested template for raising a complaint or providing information to the Adjudicator .

Practical implications

Suppliers will probably remain reluctant to raise GSCOP issues directly with Designated Retailers for the foreseeable future.  However, the Adjudicator’s stance on confidentiality should now encourage many more suppliers to come forward with complaints.

And not just complaints – the Adjudicator will be receptive to information about breaches of the Code by particular Retailers.  Where a number of suppliers have had a similar experience with a Retailer, and the Adjudicator can see a body of evidence building up, that could prompt an investigation even though no individual supplier has raised a complaint as such.

Every supplier, anywhere in the world, who has direct dealings with any of the DRs should therefore consider:

  • reporting to the Adjudicator, confidentially, anything – and everything – that may be a breach of the Code
  • in serious cases, especially where the practice complained of is known to be widespread, making a formal confidential complaint to the Adjudicator.

Why bother?

Because, over time, consistent awareness of and compliance with the Code should lead to:

  • fairer supply agreements with the Designated Retailers
  • fairer and more consistent performance on their part
  • most importantly – better profit margins on the business you do with them.

How we can help

We can advise whether a particular practice is a breach of the Code and, if so, on the best way of dealing with it depending on your circumstances.  If you need advice on a specific issue, please get in touch by using the contact form.  We’ll be happy to discuss what you need and how we might be able to help you.