Groceries Code Adjudicator findings

Last week the Groceries Code Adjudicator, Christine Tacon, found Tesco to have breached the Grocery Supplies Code of Practice (GSCOP) by deferring payment of money owed to suppliers.

GSCOP is a legally binding code imposed on the UK’s 10 largest supermarket retailers intended to protect groceries suppliers.  It imposes obligations on those retailers to deal with suppliers fairly and lawfully, applying good faith, and without duress. 

Following an investigation covering the period from 25 June 2013 to 5 February 2015, the Adjudicator found that delay in payments was a widespread issue affecting a broad range of Tesco suppliers on a significant scale.  In certain cases the Adjudicator found evidence that Tesco knowingly delayed paying money to suppliers in order to improve its own financial position.  Some payments were delayed for as long as two years.

The report contains several recommendations, and Tesco has been given a deadline of four weeks in order to set out how it plans to implement them.

The Adjudicator’s findings should serve as a reminder to the 10 retailers currently subject to GSCOP of their duties under the Code.  In particular, the Code requires retailers to pay suppliers in accordance with agreed contractual terms and in any event within a reasonable time after the date of the invoice.  Suppliers to the designated retailers, often reluctant to raise complaints for fear of being de-listed, should take comfort from the Adjudicator’s increased willingness to use powers to enforce the Code.        

A copy of the report in full can be found here.

Article by Oliver Kidd, Associate

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