Groceries Code Adjudicator publishes report on business practices at Tesco
Partner Bill Dixon comments on the recent report on breaches under the Groceries Supply Code of Practice following an investigation into alleged unfair treatment of suppliers by Tesco.
In 2013 Christine Tacon was appointed as the first Groceries Code Adjudicator (GCA). The purpose of the Code is to make sure that the UK’s largest supermarkets treat their direct suppliers fairly. It imposes obligations on supermarkets that go beyond their strict contractual obligations. The Code currently applies to Aldi, Asda, the Co-Op, Iceland, Lidl, Marks & Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose.
A report has recently been published by the GCA following an investigation into Tesco. The report concluded that Tesco had acted in breach of the Code in the way it dealt with its suppliers by delaying payments, making unilateral deductions and failing to resolve data input errors promptly. On a second complaint, however, the GCA found that there was no evidence that Tesco had required suppliers to make payments in order to secure better positioning or increased allocation of shelf space.
Because of the timing of these particular breaches, the GCA concluded that she did not have jurisdiction to impose a financial penalty (in theory she can impose a fine up to a maximum of 1% of a supermarket’s annual UK turnover). However she did make a number of recommendations as to ways in which Tesco needed to change its working practices for the future.
FSP has extensive experience of the Code, having acted in one of the first arbitrations before the GCA. For more information please contact Bill Dixon on [email protected] or telephone 0118 951 6328 or Tom Maple on [email protected] or telephone 0118 951 6309.