Manufacturers have welcomed the OFT’s latest probe into the relationships between the big four grocery retailers and their suppliers. But none of the top executives we quizzed this week thought anything worthwhile would come out of the compliance audit planned by the competition watchdog.
We also asked the executives on our reader panel for their views on the supermarket code of practice and just over half said they had experience of customers either breaching the code or coming pretty close.
“There have been instances where a couple of the big four have sailed close to the wind,” said one supplier. “When we have pointed this out, they retreat, carefully restate their position and then sulk off to their lair like wounded lions!”
Another said: “They all come close from time to time. But as buyers seem to be trained in how to extract as much as possible from suppliers without breaking the rules they have managed to stay on the right side of the line.”
Although one supplier thought the industry was approaching the point at which suppliers would be willing to use the code, most of those we questioned still felt it was highly unlikely that anybody would complain to the OFT about a key customer.
What is also revealing about the results of our strawpoll is that some of the country’s biggest suppliers think the code is not relevant to them.
“We have the size to bring clout. We would say negotiations are tough but not unethical,” says one executive. He adds: “The investigation will probably miss the mark and focus on major suppliers. The real issue is not with us but with small suppliers.”
Julian Hunt