The Groceries Code Adjudicator is to quiz supermarkets over alleged delays to payments which he says are putting the “survival” of some suppliers at risk.
The Grocer understands Mark White is to hold a series of meetings with retailers’ code compliance officers in the next few weeks, as a flood of cost price increase (CPI) requests puts further strain on relations with suppliers.
With food inflation at the heart of the cost of living crisis, a report commissioned by the adjudicator from YouGov last month accused suppliers of resorting to “delay tactics”, with the big five reported to be using them the most.
Although GSCOP does not allow the adjudicator to intervene on matters concerning prices, he does have the power to act over unreasonable delays to payments.
The latest intervention comes after the adjudicator published a set of “golden rules” in January which were voluntarily taken up by all supermarkets.
These included commitments that there would be “clearer communication” about how long CPI requests would take and prioritisation of the impact on smaller suppliers.
“The GCA will be meeting the code compliance officers at the designated retailers in the coming weeks as part of his regular engagement with them,” said a GCA spokesman.
“Whilst price is not covered by the Code, he will be speaking to the retailers about how they are negotiating with their suppliers and whether they are following the GCA’s golden rules.
“Concerns continue to be expressed about how the implementation of agreed price rises is being delayed, which could risk the viability of suppliers, and how buyers are engaging with their suppliers during these difficult negotiations.”
Retail Mind founder Ged Futter said: “We have a pressure cooker situation that has been building all year and is now about to blow.
“The pressure on buyers to deliver at a time they are losing share is higher than it has ever been.
“For example, we are seeing them using Aldi Price Match as a reason for delaying passing on inflation. That has got nothing to do with suppliers.”
British Brands Group director John Noble, who last month called for stronger powers to allow the adjudicator to intervene on CPI requests, said suppliers were continuing to report delays to payments and requests for confidential information from supermarkets to justify price increases.
“It’s very encouraging to see that this is a focus for the adjudicator,” he said.
“Whilst there are some retailers who are collaborating with suppliers in this hugely difficult period of inflation, elsewhere we are seeing these tactics continue and it is putting a great strain on relations.”
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