Christine Tacon’s reappointment as Groceries Code Adjudicator the same day a YouGov survey of suppliers showed a marked improvement

christine tacon

Christine Tacon

Christine Tacon’s reappointment as Groceries Code Adjudicator was confirmed on the same day a new YouGov survey of suppliers (see table below) showed a marked improvement in supermarket behaviour. It should have been a cause for celebration, but in this highly politicised role, a number of questions remain about both her position and the results.

1. How long will Christine Tacon remain Adjudicator? Tacon began the day without a formal extension to her initial four-year term. Business minister Margot James, who sent her apologies at short notice, issued a glowing tribute by video instead. She described the Adjudicator as “internationally a model example of modern enforcement”.

James’ excuse for failing to turn up was that she has still not been officially reappointed due to the delays in starting the new parliamentary term. Her department has not got round to publishing a statutory review of the GCA role, launched last October, let alone a far more contentious review of Tacon’s remit, which looks to have been pushed into the long grass.

Despite these delays, The Grocer has learnt that Tacon has accepted a three-year extension to her contract with a break clause after one year. What appears almost inevitable is that Tacon herself would step away from the role if, as many politicians and farming bodies want, the remit is extended to cover indirect suppliers.

This week Tacon expressed frustration at how slow the government has been to clarify her role, having also claimed difficulty in attracting staff because civil servants are too tied up with Brexit. “It would be fair to say I’m disappointed at the speed with which the statutory review has been conducted,” Tacon says.

2. Is an extension of the remit likely? Amid the chaos of government, many senior sources believe plans to extend Tacon’s remit to cover indirect suppliers are unlikely to see the light of day in the next parliament, if at all. The Grocer reported in February that the call for evidence on the issue looked set to be put back months, if not years, and that was before the extraordinary events of the election.

The issues date back to promises first made by David Cameron, in the midst of the milk price crisis, that he would look to extend the Adjudicator’s remit, followed by demands from the House of Commons Environment, Food & Rural Affairs (Efra) Committee, which slammed Tacon’s role as “too restricted” to be of assistance to the majority of dairy producers.

The NFU says Tacon has “changed the culture and behaviour” of the top 10 retailers and should be allowed to use her “teeth” to tackle more retailers and suppliers, plus have extra power to protect primary producers. However, the idea of expanding the GCA remit to cover thousands of suppliers is fiercely opposed by the likes of the BRC and the FDF, as well as Tacon herself.

Sources suggest BEIS is also opposed to the expansion, and have reported clashes in the corridors of power with Defra on the issue.

Despite the pressure from farmers, will the government have the willpower or time to embark on an expansion that would almost certainly require a fresh CMA investigation and potential primary legislation to back up the new powers? One retail leader says: “I can’t imagine that this will come out of the long grass any time soon. The government has got so many other issues and uncertainty to deal with over the future of the food industry. This will be way down the list.”

3. Will drop & drive become the subject of the next GCA investigation? For three supermarkets, this week’s conference took place under the looming threat of a new official investigation by Tacon, which would be her first since the Tesco scandal. Tacon has given the unnamed supermarkets until next month to respond to accusations by suppliers that they unjustly deducted tens of millions of pounds for so-called drop & drive discrepancies.

Tacon says the supermarkets have been “drinking at the last chance saloon” by ignoring her warnings on the issue. The GCA’s YouGov survey found 13% of all respondents had raised issues with drop & drive breaches. That figure soared to 24% for chilled, dairy & ready meal suppliers, 18% of meat & fish suppliers and 17% of fruit & veg suppliers.

Ged Futter, founder of training body, says the warning by Tacon could be the “tip of the iceberg”. “This system is heavily weighted in the retailer’s favour, so it’s no wonder millions of pounds are being deducted by them.

The wise money is on the suppliers in question either forking out millions in compensation or trying to suggest a compromise to show they are tackling the issue. Sainsbury’s has recently bought in new so-called “good-faith reporting” procedures for drop & drive charges that are less skewed towards the retailer.

4. Why is supplier knowledge of the code still so dismal? Big suppliers are now well groomed in the workings of the code, the survey revealed. But 31% of micro suppliers said they either had no or poor understanding of GSCOP, with almost a quarter of small and medium-sized suppliers saying the same. Those figures have got worse, not better, since last year, despite Tacon’s attempts to encourage training. This may have resulted from having more responses from overseas suppliers (20% of the sample), but “I honestly believe there is a degree of apathy among suppliers, who have accepted they will live with the status quo,” says Tacon. She also criticised trade bodies for failing to establish themselves as a focal point for training (although many are understood to argue this was not why they were set up, especially with many of the 40 plus food and drink organisations having limited funds for training).

Tacon said one supermarket was considering paying for suppliers to undergo training in GSCOP itself. However, this could pose potential conflict of interest concerns.

At least understanding of the code is on the up among larger suppliers, of which 51% say they have a good understanding compared with 40% last year. Yet even in that category 8% said they were unaware of the code. “It’s appalling that one in four suppliers doesn’t understand the code,” says John Noble, director of British Brands Group, which has developed an online quiz to try to improve suppliers’ knowledge.

5. Which retailers are treating suppliers well and who are the bad guys? A “dramatic” improvement in supermarket behaviour across all her priority issues (see graphic, left) would suggest the Adjudicator is doing a brilliant job. The proportion of suppliers experiencing potential breaches of the code has plummeted by nearly a third since its high in 2014, according to the YouGov poll for 2017, when Tesco’s scandalous treatment of suppliers was dominating the news.

There were substantial falls in reports of alleged breaches relating to forensic auditing, margin maintenance, consumer complaints, and packaging and design charges. The report also showed suppliers are now more confident that if they raise an issue with the Adjudicator it will be acted on, and fewer are afraid to come forward because of a “climate of fear”, while 43% said they didn’t need to raise issues because they could handle them themselves .

In fact, all supermarkets were found to have made improvements. Even Iceland, which was named the worst offender (see p5), achieved a net improvement score of 7, and performed well in terms of code issues. Tesco made the most dramatic improvement (with a swing of 46) and Morrisons came a close second (with a swing of 35). Tacon describes Morrisons’ conduct as a “step change”.

Of those surveyed, 91% say it is now complying with the code consistently or mostly well, compared with 80% last year.

Despite some tough competition, Aldi remains top of the league for the fourth year in a row. Tony Baines, MD of buying, says: “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.”

groceries code adjudicator graphic