Robust supply contract key to satisfying GCA concerns
Friday 14th August 2015
The Groceries Code Adjudicator (GCA) published her annual report on July 20. There has been almost no publicity about it, which I suspect is a touch disappointing for the adjudicator, Christine Tacon, given one of her stated objectives is to promote her activities and the report is the culmination of one year’s work.
The report is a useful tool for retailers and suppliers as it provides insight into the issues which are on the GCA’s ‘hit list’.
We know her top five issues as forecasting/service levels, requests for lump sum payments, packaging and design charges, consumer complaints and delays in payments, but she also states the key concerns of suppliers she will look at next are:
Supply Agreements – retailers are either not putting these in place or they are being varied during the contract term. Suppliers say they are asked for lump sum payments to maintain margin, pay for audits and payment terms are being adjusted by retailers without a right to do so.
Price and Payments – Suppliers say deductions are being made from trading accounts without good reason and where deductions are incorrectly made, retailers are slow to repay. The GCA says retailers can be slow to amend its price files after promotions, packaging/artwork charges are used to make money and listing fees are still being requested.
Promotions – Suppliers continue to have concerns about the allegation that payments are required for better positioning of goods and retailers are over-ordering promotional stock.
De-listing – One of the biggest issues for suppliers and retailers alike. The consequences for supplier can be devastating. How should a supplier be de-listed? The GCA believes the position is unclear for both parties and retailers are de-listing for the wrong reasons and not giving suppliers correct notice.
The detail in the report offers retailers an opportunity to get ahead of the curve in complying with the Groceries Supply Code of Practice (GSCOP) before the GCA raises them.
Most of the issues the GCA is concerned about can be addressed by retailers tweaking their terms and conditions to cover these points. The supply agreement is the most important document for retailers and suppliers alike and those who appreciate that will find their bargaining position is much improved.
For more information in relation to GSCOP or supply contracts, contact Gordons’ retail experts, Mark Jones on 0113 227 0297 or at firstname.lastname@example.org or Andy Brian on 0113 227 0354 or at email@example.com.