Four in five suppliers to the UK grocery industry have reported “issues” in their dealings with the country’s major food retailers, as categorised by the Groceries Supply Code of Practice, a YouGov survey has found.
The survey, commissioned by the UK Groceries Code Adjudicator, claimed 40% of respondents reported a “variation” of supply agreements or terms of supply.
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The second most common issue among the survey’s 574 respondents was unjustified charges for consumer complaints, which was cited by 37% of those questioned by YouGov.
According to the survey, which attracted 574 respondents across the UK food industry, 36% reported an obligation to contribute to marketing costs.
Some 35% of respondents to the survey, held between from 8 to 26 May, reported a delay in payments.
Almost a third had five or more of 14 issues raised by respondents, YouGov said.
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By GlobalDataThe results were published in London to mark the Adjudicator’s first year. Christine Tacon, who currently holds the Adjudicator’s office, said there had been “significant progress” in one of the top five issues suppliers had raised with her.
Eight of the UK’s ten largest food retailers have made voluntary commitments to put limits on forensic audits – a process in which accounts and records are analysed in detail for money that might be owed to the retailers. These audits can go back up to six years. The eight – Aldi, Asda, The Co-operative Group, Lidl, Iceland Foods , Marks and Spencer, Tesco and Morrisons – have agreed to limit their search for missed claims in suppliers’ trading accounts to the current and two previous financial years. This will be on a reciprocal basis where suppliers agree to make the same commitment.
Christine Tacon, who currently holds the office of Adjudicator, said: “I am delighted that eight of the large retailers have taken on board the concerns I voiced about the impact on suppliers – particularly small suppliers – being asked for sometimes significant sums of money several years after they have closed their accounts for any particular year.”
However, Tacon said more progress was needed on five key areas: third-party audits; delivery performance; forecasting/service levels; requests for lump sum payments; and packaging and design charges.
“I want to ensure that the UK has a world-leading groceries supply chain. There are indications that overseas suppliers are beginning to recognise that it is easier to do business in other areas of the world than in the UK. With tightening food security, we need to ensure that supplying to overseas markets does not become more attractive than supplying to the UK,” Tacon said.
