The FT reports that since March, the Groceries Code Adjudicator (GCA), Christine Tacon, has been investigating alleged mistreatment of suppliers by the Co-operative Group, her former employer.
There were complaints that the Co-op dropped suppliers without fair notice, levied unfair fees on them, delisted products and changed quality control procedures. One in five suppliers of the Co-op did not agree that trading relationships were conducted in “good faith and without duress”. The Co-op admitted failures and said it had taken action:
“We acknowledge that we have fallen short and have been discussing the two issues raised with the GCA for some months. We have already taken decisive steps in line with our commitment to ensure the fair treatment of all of our suppliers.”
The Group has strengthened systems and processes, retrained 450 staff and written to its 1,500 direct suppliers to seek information on delisting decisions that they believe may have been taken without appropriate consultation. It has also reviewed every case where a supplier was charged for benchmarking and quality control and refunded 110 suppliers approximately £500,000.
Jo Whitfield, chief executive of Co-op Food, said: “We care deeply about our relationships with our suppliers and we are very sorry that in these two areas we have failed to live up to our usual high standards. We are already addressing the issues with the GCA and our suppliers and we hope the investigation will help bring to light any additional cases so that we can put these right as quickly as possible.”
This is the second inquiry undertaken by the adjudicator and the first since it was given the powers to fine supermarkets up to 1% of their annual sales in 2015. In the case of the Co-operative Group, such a fine would amount to about £70m.
It remains to be seen if Christine Tacon (right), will be able to improve the behaviour of giant retailers. James Hurley in the Times refers to her ‘scant resources’, earning more than £75,000 for a three-day week, with ten regulated retailers paying a combined £2 million levy to fund her office’s activities and a team of six is seconded from other public bodies.
The most important cogs in the chain, food producers, cannot access GCA services or any comparable means of obtaining redress.