Survey shows fall in suppliers seeing supermarket breaches of grocery code

27 June, 2016

A YouGov survey for the Groceries Code Adjudicator shows a fall in the number of suppliers experiencing code-related issues in the past year.

The GCA said 62% of direct suppliers to UK supermarkets had an experienced an issue in the previous 12 months, down from 70% in last year’s survey and 79% the year before.

Lidl, Aldi and Sainsbury’s rated as the companies who suppliers thought complied with the code “consistently well” or “mostly”.

Tesco – subject of a specific investigation by the GCA into the supermarket’s compliance with the code – put in a better performance, with 65% of suppliers saying it had improved its practice and just 5% saying that it had got worse.

Groceries Code Adjudicator Christine Tacon claimed the results showed the benefit of her office’s work.

“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,” Tacon said.

The most common issue experienced by suppliers was incorrect deductions from invoices, which was raised by 30%.

Twenty-eight per cent highlighted excessive retailer charges for artwork or design and 22% named lack of compensation or penalty charges for inaccurate forecasting.

Tacon has launched a formal consultation into payments for better positioning of goods in stores.

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

“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.

“I also saw examples of significant payments for category captaincy and range reviews where suppliers felt that if they didn’t pay they would be adversely affected in terms of positioning on shelf.

“Such arrangements appear to have the potential to have an adverse effect on competition.”

The GCA said an “area of disappointment” from the survey was no change in the proportion of suppliers prepared to bring information to the GCA.

Tacon said: “I am disappointed that the number of suppliers saying they would bring an issue to me remains stubbornly on 47% - with more than half giving the reason as fear of their relations with a retailer being damaged.

“This is despite the publicity around the Tesco investigation and a clear demonstration that I can carry out a complex investigation with significant findings and benefits for suppliers with no identities revealed.”

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