Mark White says ‘golden rules’ must apply in cost price decrease dicussions as well as in CPIs
Groceries code adjudicator Mark White has urged fresh produce suppliers to come forward and report any poor buyer behaviour at a time of tension with supermarkets.
Speaking at the recent National Fruit Show, White said the issue of price negotiations has been a top concern for suppliers this year, and while the adjudicator cannot get involved in commercial discussions, he has outlined his ‘seven golden rules’ for buyers to follow.
- Clear communication from the outset by retailers about the process and how long it will take;
- Awareness, and prioritisation, of the possible greater impact on smaller suppliers;
- Support for buyers from colleagues who have experience of dealing with cost price increase (CPI) requests;
- Only asking for the specific information from suppliers that is needed to make a CPI decision;
- Clear communication of the outcome, so there can be no grey areas;
- No automatic delists or fixed delist notice periods following CPI negotiations;
- Reminding buyers about abiding by competition law e.g. never asking suppliers about other retailers’ plans or retail prices.
White said that while these golden rules were originally drawn up to cover CPI negotiations, they should also be adopted for cost price decreases as input costs begin to fall.
“Inflation has been the biggest non-Covid, non-labour challenge [for suppliers] in the last few years,” he said. “I expect cost price decrease negotiations to be conducted with the seven golden rules also applying on the way down. I implore suppliers to let me know if they are not being followed.”
Another issue for White is the lack of experience among buyers. It has long been a complaint of suppliers that buyers are rotated rapidly within supermarkets, and there isn’t time to develop a relationship or for the buyer to properly understand the category.
“I am concerned by the loss of established buyers who have real depth of knowledge,” he said. “Handling difficult issues is much more difficult with less experienced buyers. They need a breadth of knowledge, and knowledge based on individual suppliers. If suppliers find that buyers are not visiting their farms, keep inviting them along and also let me know.”
White emphasised that he will prioritise the anonymity of suppliers when it comes to any information passed to him.