Complaints to Groceries Code Adjudicator fall

Christine Tacon: ‘The collaborative approach that I have promoted has been a real engine of change’

Far fewer food and drink suppliers are complaining of abuses from their big retailer customers, according to the results of the annual online survey published by the Groceries Code Adjudicator (GCA) today (June 26).

Figures from consecutive years of YouGov polling for the GCA demonstrate the significant impact on the big issues that she has raised with the UK’s largest supermarkets, claimed Christine Tacon. Improvements in fairness for suppliers had been achieved, she said, with this year’s results showing the greatest reduction in levels of complaints.

At the same time, the 2017 YouGov survey, published (see box below) to coincide with the GCA’s annual conference, showed for the fourth year running fewer direct suppliers reporting they had experienced one or more problems in the past year related to the Groceries Supply Code of Practice (GSCoP). The proportion now stands at 56%, down from 62% in 2016 and from the high of 79% in 2014.

“The overall fall is welcome but the more dramatic data comes from looking at supplier experience of issues that I have identified among my top five [issues] and where I have used collaborative or more formal regulatory action to drive change,” said Tacon.

“Suppliers have found the issue of packaging and design charges to be an irritant for years. Recently, a supplier in the fresh produce industry told me that that they had been trying to resolve the problem of overcharging in this area for more than 10 years. But within 18 months of me focusing on the problem, he was pleased to say the issue had gone away.

‘Collaborative approach’

“I see this as a sign that the collaborative approach that I have promoted has been a real engine of change and is achieving positive results across all retailers. I am delighted that suppliers are seeing the benefits of this change.”

The 2017 survey saw a large increase in the number of suppliers participating (1,220), up 320% from the first poll in 2014.

For the fourth year running, Aldi topped the overall table in which suppliers rank their perception of retailers’ compliance with the GSCoP. Sainsbury was the highest placed of the big four major multiples – which included Tesco, Asda and Morrisons – also for the fourth year in a row.

Commenting on the findings, Tony Baines, md of Buying for Aldi, said: “We are incredibly proud to have topped the Groceries Code Adjudicator’s annual survey for the fourth consecutive year.

“We recognise that pressure on supply chains is increasing across the retail sector, but our approach will not change. We will continue to build long-term relationships with suppliers that are fair, sustainable and predictable.”

Tacon added: “I am also pleased to report that suppliers are recognising that Tesco is continuing to improve; as is Morrisons, following a step-change in its engagement with suppliers,”

Payment delays is biggest issue

Delay in payments continues to be the issue of biggest concern to suppliers and remains in the ‘current’ category in the GCA’s top five, along with forecasting and, linked to this, the issue of promotions. The new list of top five issues is: ‘current’ – delay in payments; forecasting; promotions; ‘monitored’ – payments for better positioning; and pay to stay.

“My survey is showing that the clarity I provided on delay in payments in the report of the investigation into Tesco and through working collaboratively with retailers has been valuable to suppliers and retailers alike,” said Tacon. “Practices are improving and suppliers are getting a better understanding of how I interpret the [GSCoP] in this area and what they can challenge.

“One of the key areas where delay in payments manifests itself is in incorrect deductions from invoices with or without notice, with 32% of suppliers reporting this as an issue in this year’s survey. While this is down from 46% in 2014, this shows me that there is still work to be done in this area and I am right to maintain this as one of my top five issues.”

At the GCA conference, titled ‘Driving change, making an impact’, Tacon confirmed that she had committed to continue for another year as GCA while her remit is still being considered by the government. An announcement regarding her reappointment is expected from the government soon.

Problems raised by suppliers with the GCA
  • Forensic auditing: 45% of suppliers reported experiencing this as an issue in 2014 but only 12% in 2017. In 2014 the Adjudicator secured a voluntary commitment from eight out of the 10 regulated retailers to limit forensic audit activity to the current year plus two.
  • Margin Maintenance: The GCA initially raised concerns about retailers requesting lump sums to maintain margin in 2014 and her report of the investigation into Tesco made clear that any request for margin needed to be unambiguously supported by supply agreements. In 2017 only 10% of suppliers have reported this as an issue, down from 36% in 2014.
  • Consumer complaints: In 2014 unjustified charges for consumer complaints was the second biggest issue with 37% of suppliers reporting it. A year later the GCA published a best practice statement and monitored progress. In 2017 only 12% of suppliers have reported it as an issue.
  • Packaging and design charges: Following action from the GCA only 11% have reported concerns with packaging charges this year compared with 24% in 2014 and 30% in 2015.

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