Adjudicator Christine Tacon has called off her threat of an imminent investigation into three supermarkets over alleged code breaches due to ‘drop and drive’.
Earlier this month, The Grocer revealed Asda, the Co-op and Morrisons had all set out plans to respond to Tacon’s threat, after she issued a deadline of the end of July for them to make changes to their practices.
The GCA said this week it had written to all of the supermarkets involved, recognising that they had taken steps to ensure they complied with the code.
One of the retailers, which has not been named, has been asked to provide further information about its drop and drive practices, but it is understood that the threat of the first GCA investigation since the probe into Tesco two years ago has in effect been lifted.
Previously Tacon has warned that the three supermarkets were “drinking in the last chance saloon” over drop and drive and could face an investigation. If found guilty, they could have seen fines of up to 1% of their turnover.
The allegations concerned retailers that have been routinely penalising suppliers over perceived discrepancies in pallet loads delivered to distribution centres.
Tacon received information from a group of 20 leading suppliers last year had shown they were being deducted between them £15m a year by supermarkets for alleged discrepancies, equivalent to 40 cases in every 10,000 being questioned.
Morrisons and Asda have since rolled out a new so-called Good Faith Receiving process under which they agree to pay suppliers for all deliveries, and rather than have the power to question any load, use spot check audits instead.
Meanwhile The Co-op said it had taken an “industry leading” position on Drop and Drive whereby all delivery invoices were paid in full and disputes settled later by mutual agreement.
“The Groceries Code Adjudicator Christine Tacon has now written to all retailers responding to their letters that describe their processes to resolve the drop and drive issue which relates to delay in payments in cases of disputes over deliveries,” said a GCA spokeswoman.
“She recognises that all the retailers are taking steps to put processes and systems in place to ensure they are code compliant, but she has posed further questions to one retailer. “As this is a current issue, the GCA expects updates on progress at each quarterly meeting and is keen to hear from suppliers how the retailers’ efforts are working in practice. Her objective is to get retailers to change their practices and her approach is to work with them wherever possible to encourage the swiftest possible progress.”
Jonathan Kittow, a consultant for Simply Supply Chain, which has been involved in the talks, said: “I’m satisfied that the actions the three retailers have taken are in line with resolving this issue.”