Sainsbury’s, Aldi and Lidl have topped a supplier survey that rated supermarkets according to their compliance with the Groceries Supply Code of Practice (GSCoP).
Tesco was nominated as most improved retailer in terms of code compliance, with 65 per cent of its suppliers reporting that its practices have improved and only five per cent reporting they had worsened.
The results were released as part of a YouGov survey carried out on behalf of the Groceries Code Adjudicator (GCA). They were released at the GCA’s third annual conference held in London today (27 June).
Top issues experienced by suppliers include incorrect deductions from invoices, excessive retailer charges for artwork or design, and no compensation/incurring penalty charges for inaccurate forecasting.
Adjudicator Christine 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.”
Aldi MD Tony Baines said: “We enter into clear, commercial agreements with all our suppliers and that provides certainty around terms of business, giving suppliers security and helping them to invest in the future.
“The market is now changing and the way other retailers operate is changing significantly. Promotions, which can often harm suppliers, have fallen from favour and while there’s still a long way to go to reach the high standards set out by the groceries code, we are pleased that more retailers are recognising the benefits of working with suppliers in this way.”
The survey findings and results from the Tesco investigation have helped form a new list of top five issues, Tacon said, which will be the focus for the GCA in the next year.
The new list of Top 5 issues include charges for artwork and design services, delay in payments, margin maintenance, pay to stay arrangements and payments for better positioning. In addition, she has also launched a formal consultation into payments for better positioning of goods – one of the five issues.
“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. “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.”
Other findings from the survey included:
- Increases in supplier knowledge across all retailers about where to find the Code Compliance Officers;
- A fall in the number of direct suppliers saying they have raised an issue with a retailer in the past 12 months (17 per cent to 13 per cent);
- Jump in both good understanding of the Code and good understanding of the GCA’s role and responsibilities (up seven per cent).
- The percentage of direct suppliers who raised an issue in the past year has fallen from 70 per cent, to 62 per cent
There was no change in the number 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 per cent – 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. In the coming year I will be redoubling my efforts to overcome this fear factor and also to reach suppliers overseas where knowledge of the GCA remains low.”
The Fairtrade Foundation also highlighted the need for better promotion of GSCoP among overseas suppliers. “At the sharp end of international trade, farmers in poor countries are particularly vulnerable to unfair trading by retailers in the UK,” said the organisations’ senior policy manager, Shivani Reddy. “To truly stamp out unfair trading, overseas suppliers must have a voice.”
The Fairtrade Foundation called for the GCA to extend its remit to ensure that fair-trading relationships are supported at all levels, including overseas.
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