Co-op guilty of misconduct against suppliers, GCA finds

The NFU has welcomed the Groceries Code Adjudicator’s (GCA) recommendations as a result of its investigation into the Co-op, following two breaches of the Grocery Suppliers Code of Practice (GSCOP) by the supermarket.

NFU President Minette Batters says the five recommendations are of ‘paramount importance’ in holding the supermarket to account and will serve as a message to the rest of the supply chain that fair supplier relations are key to a healthy supply chain.

The Co-op was found to breach GSCOP by delisting suppliers without reasonable notice and variations of supply agreements without reasonable notice.

The GCA recommended that:

  • Co-op must have adequate governance to oversee and manage its compliance with the Code
  • Co-op legal, compliance and audit functions must have sufficient co-ordinated oversight of Co-op systems to ensure Code compliance
  • Co-op IT systems must support Code compliance
  • Co-op must adequately train on the Code all employees who make decisions which affect a suppliers commercial arrangements with Co-op
  • Co-op must in any potential delisting situation communicate with affected suppliers to enable Co-op to decide what is a significant reduction in volume and reasonable notice

Responding to the findings, Batters said: “We welcome the GCA’s thorough investigation which has been able to identify some fundamental root causes to the two breaches of the Grocery Suppliers Code of Practice.

“Subsequently, the five clear recommendations are of paramount importance, as they not only hold the Co-op to account, but sends a clear message to the rest of the grocery market in remaining Code compliant. This is of particular importance as we continue to do business in an uncertain environment.

“All retailers must recognise the significance they play to our members supplying them. Unreasonable notice given or a shift of the goal post at short notice, can significantly impact our members ability to run profitable sustainable businesses.”

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