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Take advantage of training to learn all you can about GSCOP and competition law

In my travels training suppliers, I see and hear some horror stories, and I thought I’d share a few. Plus, offer some useful facts about this most necessary of evils: the law and how it pertains to UK grocery.

A national account manager recounted this sentence to me from a top four supermarket buyer: “If you keep doing that, I’ll have to report you to the GCA.” Buyers are trained every year in GSCOP law. Clearly, their knowledge took a holiday that day. It is worrying.

Or this desperate sentence from a NAM: “GSCOP will help me get CPIs through.” GSCOP won’t sort the negotiation problem. It can’t. This is why negotiation, conflict management and persuasion skills are so critical. Only a third of NAMs get ongoing training in this soft skill. Many just receive it once in their career. No wonder many come back from buyer meetings broken.

A ranting NAM: “What the hell does ‘reasonable notice’ mean in GSCOP?” An excellent question. The problem is the way the law is worded. Where it isn’t clearly defined, it’s a grey area. The best you can do is to put forward a compelling case. Even better, have a written supply agreement in place. Only 47% of suppliers have one and it is the one piece of defence that will really help you in disputes.  Argue, negotiate, persuade, and fight to get your written supply agreement.

Here are the key points you need to know:

GSCOP

  • Suppliers are bound by competition law and are not bound by GSCOP law.
  • Only 14 retailers are bound by GSCOP. The latest was Amazon, which was added in 2022.
  • 16% of suppliers are still unaware of GSCOP.
  • A retailer can be fined up to 1% of their UK turnover. That is £572m for Tesco.
  • The biggest issues suppliers report is getting invoices resolved quickly.

Competition law

  • The fine for breaching competition law is 10% of global sales. That is £6.53bn for Tesco.
  • According to a CMA study, just 25% of businesses demonstrated a good understanding of competition law. Another worry.
  • In 2023 the CMA handed out fines of £64m for breaches, with Asda receiving a fine of £60,000.
  • Suppliers can set a maximum price for their products. Yes, this is allowed (there are caveats).
  • Informal conversations are illegal if they restrict competition. Beware!
  • You’d expect an independent financial advisor to know the FCA’s rules. We’re no different.

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