Lidl has been accused of breaching the Groceries Supply Code of Practice (GSCOP) by its former supplier and is now facing a £2.6 million court claim.
According to reporting by The Grocer, fresh food supplier Proctor & Associates Ltd is taking Lidl to court over claims that it lost money and ceased trading as a result of the discount grocer delisting 57 of its product lines with no notice.
The supermarket has been accused of breaching paragraph 16 of GSCOP, which requires retailers to both provide reasonable notice to delist a supplier and written reasoning for this.
According to The Grocer, the claim states: “The claimant has lost profit that it would otherwise have earned during the notice periods to which it was contractually entitled in the total sum of £2,153,425.43.”
It also claims that Lidl went on to source produce directly from Proctor & Associates’ own suppliers.
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In April 2016, Lidl had placed orders of almost £700,000. However the claim alleges over the course of three years this was reduced significantly without notice to £306,000 in 2019, before buying then stopped completely.
According to documents filed at the High Court last month, Proctor & Associates had a contract to supply Lidl with asparagus from 2008 to 2018 and celeriac from 2006 to 2018.
However, Lidl has been accused of halting purchases with no written notice before going on to source the celeriac directly from Proctor & Associates grower via a third party.
Lidl has also been accused of going directly to Fredrick Hiam Farms for vegetables to use in soups, Proctor & Associates main supplier for the products for 10 years.
Other products including chilli, apples, broccoli, pears, plums and pumpkins have also been mentioned in the case.
The Grocer reports that the court papers said: “The defendant placed its last order on 26 October 2018 and thereafter sourced pumpkins direct from growers (including the claimant’s grower) only informing the claimant of that in August 2019 – well into the growing season and too late for the claimant to make alternative arrangements to supply to others.
“Moreover, in breach of the defendant’s obligation of fair dealing, the claimant understands that the defendant had approached the claimant’s supplier, Oakley Farms, and informed it that the claimant would no longer be supplying the defendant and invited the claimant’s supplier to supply pumpkins directly, the consequence of which was to cut the claimant out of its own supply chain.”
Retail and grocery law firm Gordons LLP, which is Proctor & Associates representation for the case has accused Lidl of “cutting the claimant out of its own supply chain, established over many years.”
