Groceries Code Adjudicator 2015 Survey – What it actually tells us!

On 22 June 2015, the Groceries Code Adjudicator’s (the ‘GCA’) annual conference took place. The big news story was, of course, that Tesco and retailers generally are bad at complying with the Groceries Supply Code of Practice (‘GSCOP’); but, as the GCA was quick to point out, not as bad as they were last year.

The GCA tells us in her press release that there is “some way to go”, but there are clear signs “we are on the right track”.

One of the big issues to come out of the GCA survey related to charges for consumer complaints. Under the GSCOP retailers can charge suppliers for dealing with customer complaints relating to the relevant supplier’s products. There are two ways a retailer can go about this: the long way, which requires all sorts of evidence and reports being given to a supplier, or it can agree a fixed fee in the supply agreement which represents the average cost of dealing with a complaint. Most retailers opt for the latter: it’s easier, cheaper and provides suppliers/retailers with more certainty. As a result of the survey, and the GCA’s enquiries, the GCA found that some retailers’ charges were not appropriate and, we are told in the press release, those retailers have agreed to change their practices going forward. As long as they do, no further action will be taken.

So, two years in, by my count, that is three issues which the GCA says she has effectively tackled. The first being ‘discrepancies in charging for drop and drive performance’ and, the second, ‘historic auditing’ – although most retailers have been auditing for years so it is likely that very little was given up there.

For me, the key points to draw from the survey are these (i) more suppliers know about GSCOP; (ii) suppliers are receiving training on GSCOP; (iii) suppliers are starting to raise issues with the GCA; and (iv) suppliers are experiencing fewer code related issues this year than they did last year.

But, I do not think that GCA has done enough or used the tools at her disposal to assist suppliers or retailers since she has been in office. The biggest factors which have helped suppliers since the the GCA has been established are (a) the Tesco investigation, which has made suppliers and retailers alike sit up and pay more attention; and (b) retailers’ recognition that the public cares about how they treat their suppliers.

The GCA spends a huge amount of time meeting Code Compliance Officers from the retailers (although she is beginning to send assistants now) and collecting information on the key issues she is focusing on. But, an extremely quick way to implement change would be to publish guidance on sections of GSCOP which are of concern. Take customer complaints, for example. The GCA could have issued a guidance note setting out what she expects a retailer to do/have before it applies a charge. Had the GCA done this, retailers would comply. Packaging and design charges appear to be next on the GCA’s list of issues to target, but so much time and supplier money could be saved if she were just to explain now what she thinks is and is not acceptable.

For more information in relation to GSCOP or supply contracts, contact our Retail experts, Mark Jones on 0113 227 0297 or at mark.jones@gordonsllp.com or Andy Brian on 0113 227 0354 or at andy.brian@gordonsllp.com.