The Groceries Code Adjudicator is investigating whether intermediaries are being used in the fresh supply chain by retailers to circumvent the Groceries Supply Code of Practice, The Grocer can reveal.
The move follows concerns raised by suppliers and politicians of all stripes that producers are falling outside the usual scope of GSCOP due to the employment of middlemen.
The GCA’s office this week confirmed it was “gathering information” on the issue.
A spokesman for the watchdog told The Grocer that at this point there was no evidence the practice was a “deliberate strategy from these retailers to avoid the code”. However, he added it was in dialogue with the major multiples to establish if this was the case.
Last month, The Grocer reported that new intermediaries were emerging in fresh produce retail relationships, causing some farmers and producers to fall outside GSCOP regulation.
Concerns around retailer-supplier relationships have been raised by the Get Fair About Farming campaign, fronted by veg box company Riverford Organic Farmers and supported by farming group Sustain. The campaign has called for fundamental changes to GSCOP – including ensuring all B2B relationships within the food supply chain are covered by the code.
Riverford founder Guy Singh-Watson said he would welcome “any investigation into intermediaries who are not complying with fair practice”.
“It is known that many large retailers, large food manufacturers and processors, food importers, and food packers fall outside of the remit of the GCA and GSCOP,” he added. “So, there is nothing to prevent them from subjecting farmers to short notice changes in volume, price, delivery, and payment terms.”
Whether or not the employment of a third party protects the producer is dependent on the contract in place and there is no blanket policy on inclusion, The Grocer understands.
The GCA spokesman said there could be scenarios in which the intermediary was the direct supplier, meaning producers feeding into this consolidator would not be covered by the code.
“There could be a scenario where the intermediary is [also] the direct supplier, but it certainly is a possibility and then the producers would not be covered by the code,” the GCA explained.
However, in some cases the producer may continue to be a direct supplier despite the presence of a consolidator.
The GCA has called for producers to get in touch and share their experiences and evidence regarding the issue, to establish the impact of any changes to relationships.
It has also confirmed it discussed the issue with retailers in the autumn and will do so again at its next progress meeting in March.
“The possibility that some retailers are setting up intermediaries for the sole purpose of getting around GSCOP is incredibly concerning,” said Will White, sustainable farming co-ordinator at Sustain. “If true, it only serves to highlight how current supply chain regulation is too easily bypassed.”
“The gaps in the regulation need to be closed to cover intermediaries in the supply chain, which means an expanded, more punitive, and more powerful GSCOP and GCA,” he urged.