The UK’s supermarket watchdog has published its annual grocery code compliance list, naming and shaming supermarkets for poor treatment of suppliers and other breaches of the industry code of practice.The UK’s supermarket watchdog has published its annual grocery code compliance list, naming and shaming supermarkets for poor treatment of suppliers and other breaches of the industry code of practice.
This year, Asda has secured the dubious honour of having the poorest relationship with its suppliers, leapfrogging its West Yorkshire rival Morrisons which topped the shame list last year. Iceland, meanwhile, was ranked worst for overall compliance with the Groceries Supply Code of Practice in the past year.
The question most suppliers will be asking, however, is whether yet another round of exposing the poor behaviour of the big supermarkets will actually lead to any changes.Toothless?The Groceries Supply Code of Practice was introduced by the government in 2009 in a bid to regulate the activities of Britain’s 10 biggest supermarket chains. Top of the list of concerns was how these powerful big hitters treated suppliers, with punitive payment terms, non-payment of invoices and eye-watering squeezes on small business margins rife across the industry.
Many now believe that, eight years after it was introduced, the code has done little or nothing to improve the situation. The code itself was followed up by the creation of the office of Groceries Code Adjudicator (GCA) in 2013, effectively the watchdog charged with enforcing the code.
Since then, however, the GCA, which publishes the annual compliance report, has been roundly criticised for failing to bring a single prosecution. Earlier this year, the GCA was lambasted for claiming that there was ‘no problem’ with late payments to suppliers in the supermarket industry.
Content continues below
Many businesses involved in the retail and supply sectors find the run up to the festive period can be the businest and potentially most profitable time of the year. But it can also be one of the…
You could be putting your business at risk by failing to carry out routine credit checks before extending a line of credit to customers. Any time you conduct work on behalf of a client, or supply…
When you sign up a new customer or client, it’s tempting to skip the formalities. New customers are always keen and it seems like nothing can go wrong. The last thing you want to do is sour the…
As a debt recovery company tasked with chasing down overdue payments, it makes sense for us to be a signatory of the Prompt Payment Code, the voluntary code of conduct for all businesses when it…
Meanwhile, the fact that it keeps publishing these reports outlining what the supermarkets have done wrong in itself suggests little progress is being made changing the behaviour of the big grocers. With little more than some occasional bad publicity to worry about, you get the feeling the big supermarkets see the GCA as all but toothless.Clear as MudAs for this year’s report, which is based on a survey of suppliers as well as the GCA’s own records, more than one in ten (12%) of Asda’s suppliers complained that the Walmart-owned chain rarely or never followed the code of practice in its dealings with them.
Specific accusations included the supermarket making sudden demands for lump sum payments so it could gloss over its own losses, making unexplained deductions from invoices and delving into suppliers’ private accounts.
Iceland’s relationship with the code, meanwhile, is hazy to say the least. Although the frozen discounter ranked worst overall for “general compliance”, the GCA said it had not received any specific complaints about it in the past year - prompting claims by Iceland that it was in fact the best performing retailer in terms of specific issues raised by suppliers.
About as clear as mud, then.
Over 150 Years Of Industry Experience
Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.
Image “Pay Due Key” by flickr user “GotCredit” is licensed under CC BY 2.0