‘Climate of fear’ must be tackled in grocery market – government
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The supermarket watchdog is making significant progress tackling unfair trading in the grocery supply chain, but more must be done to tackle the “climate of fear” that stops suppliers speaking out.
That is the conclusion of the government’s statutory review of the Grocery Code Adjudicator (GCA), which also said the GCA had led to a positive “cultural shift” among supermarkets in the way they treat their suppliers.
“There is, however, more to be done,” said minister for small business, consumers and corporate responsibility, Margot James.
See also: Supermarket treatment of suppliers – the good, bad and ugly
“Too many direct suppliers are still facing issues with potential breaches of the code, and I am concerned by evidence that some suppliers are reluctant to raise issues with the adjudicator for fear of the commercial consequences.”
This was despite findings that the GCA had been effective in maintaining anonymity of suppliers, such as during its complex Tesco investigation. Although it also noted that the waving of anonymity for arbitrations was an issue.
The review said the government viewed actions taken by retailers against suppliers who speak out against unfair trading practices, as “totally unacceptable” and that it would be making this clear to supermarkets.
According to YouGov polls commissioned by the GCA, the proportion of suppliers who said they would raise an issue with the adjudicator has risen slightly from 47% in 2015 to 52% in 2017.
Fear of retribution
Of the 48% who said they would not or were unsure about raising an issue in this year’s survey, 47% said this was due to fear of retribution from the retailer.
Christine Tacon, the sitting adjudicator, has been vocal about asking suppliers to come forward with evidence since she took up the position in 2014, and the review noted that she is well aware of the issue about suppliers being afraid.
A spokesperson for the GCA said Ms Tacon has repeatedly asked trade bodies to do more to collect evidence as this would add a further layer of anonymity for suppliers and she continued to offer one-to-one sessions with suppliers.
But more will be done to tackle this issue, stated the review, with the GCA and ministers working together on a plan, with its effectiveness reviewed in 2019.
As a result of the review, the GCA will remain in existence with its current set of powers and resources. Christine Tacon, the sitting adjudicator, has been reappointed for another term.
Industry reaction
A further review is still under way to look at whether the remit of the GCA should be extended to cover indirect suppliers and more retailers.
NFU
“Our members tell us that since the appointment of Christine Tacon in 2013, they have seen retailers change their way of working to a more reasonable and collaborative approach, and we would encourage this good progress to continue.
“However, there are still some areas which need to be looked at.” The NFU is calling on government for smaller retailers as well as foodservice and manufacturing businesses to be included in the remit of the GCA and the groceries code. It would also like to see the principles of a number of voluntary codes that promote best practice made mandatory.
“Sustainability, risk management and volatility management must be the food supply chain’s core principles for British farmers to thrive, particularly now we are leaving Europe.
“An imbalance of buying power within the supply chain does not make for an efficient, profitable and competitive food and farming industry.”
CLA
CLA deputy president Tim Breitmeyer said: “Since its creation the Grocery Code Adjudicator has had a positive impact on supply chain relations. However, the frustration remains that the adjudicator is limited by the scope of the code it enforces.
“We will continue to press ministers to extend the scope of the code to supply chain relationships with all primary producers as well. Only this way will we ensure the primary producer is recognised as a critical and integral part of the food supply chain for the future.”