Groceries Code Adjudicator Mark White has unveiled a new best practice statement for the industry.
The move comes in response to concerns that suppliers have raised over the way that the large UK supermarkets conduct their audits.
White said that the statement, which all 13 Designated Retailers have reportedly signed up for, will set the standard for conducting audits with transparency.
The concerns raised during the announcement included supplier delisting, retrospective audit reviews and the communication between buyers and suppliers.
White issued a warning to retailers that delisiting practices will be closely monitored, particularly adherence to the fixed 12 weeks’ notice period.
“The concept of reasonable notice which Designated Retailers must give to suppliers whose products are being delisted is not susceptible to an arithmetical or artificial formula,” he said.
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The adjudicator also drew attention to suppliers’ criticism that retailers have been “cherry picking” audit data, which has disproportionately impacted smaller suppliers.
He added that he will monitor attempts to link the settling of matters to current and future trading.
White continued: “Retailers should properly scrutinise claims before they make them; they should share with suppliers the data and documents that support a claim.
“Where retailers use third parties to make claims, that should be clear to suppliers from the outset, and retailers should review how they work with the third party to ensure compliance with the Code.”
Another issue addressed was the number of “inexperienced” buyers joining retailers.
“Many suppliers YouGov spoke to were also concerned that among these new buyers there was a lack of knowledge about the category that they are working in, with supplier spending a lot of time and effort educating the buyer, only to see the buyer move category just when the knowledge bank has grown,” White said.
“I encourage retailers to not only train their buyers in the requirements of the Code but also in the wider relationship building and in really understanding what they are asking suppliers to do.”
White concluded: “The sector obviously faces new challenges, and we still don’t know if we are through the Covid woods.
“Constructive relationships must be made for yesterday, today … and for tomorrow.”
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