The Groceries Code adjudicator Mark White is urging supermarkets to take action against buyers that demand that their suppliers “pay to stay” on their shelves.
According to The Grocer, the move is being interpreted as a warning shot to Tesco after its introduction of new supplier fulfilment fees in March, which was aimed at getting suppliers to pay for using its online and Booker wholesale services.
At the time, Tesco warned suppliers they could be delisted if they failed to take part. However, the retailer has since repeated that the scheme is voluntary.
White told The Grocer: “I am determined to ensure that all 14 retailers are treating suppliers fairly and lawfully.
“I told all the code compliance officers that retailers generally should not be requiring suppliers to take certain actions, such as paying to remain a supplier, where that is not permitted under the code.
”If I believe that a retailer may have required an action that it should not have, I will challenge them to provide evidence that this is not the case,” he said.
According to the title, White told supermarkets in writing that they must be able to provide evidence of compliance with GSCOP.
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Ged Futter, founder of The Retail Mind, also spoke to The Grocer, saying: “Suppliers I’ve spoken to are saying Tesco are saying ‘we want all investments to be into case costs’.
“That is not going to go down well with suppliers, who would in some cases be prepared to invest but would want a range of different options, such as promotional spend and other tools, rather than simply handing Tesco money to invest as it likes.
“As a supplier if I’m giving you a lower case cost I want higher volume.
“I think Tesco is going to come up against some very difficult conversations with their suppliers but the push is only going to come to shove with the Adjudicator is it starts delisting suppliers as a result,” Futter added.
The news comes as Tesco is to face strikes at one of its depots, as cleaning and catering staff have been put on new contracts without a pay increase.
