GCA launches investigation into Co-op Food Group

The investigation launched is in relation to the delisting of products and the introduction of benchmarking and depot quality control charges.

The GCA has formed a reasonable suspicion that the Co-op may have broken paragraph 16 of the Code ‘Duties in relation to Delisting’ and paragraph 3 ‘Variation of Supply Agreements and terms of supply’ over a period from early 2016 to at least summer 2017.  The GCA escalated her concerns within the Co-op in line with her published collaborative approach, however, she views that an investigation is necessary to further understand the extent to which the Code may have been broken.

The Co-op has acknowledged that it has fallen short and has been discussing the two issues raised with the GCA for some months. The retailer has already taken steps in line with its commitment to ensure the fair treatment of all of our suppliers.

The actions taken include:

-              Steps to strengthen our systems and processes for the future

-              Retraining of 450 commercial colleagues in the operation of the Groceries Supply Code of Practice

-              Writing to all of our 1500 direct suppliers to seek information on any delisting decisions that they believe may have been taken without appropriate consultation. A small number of suppliers have raised concerns which we are working through with them.

-              Reviewing every case where a supplier was charged for benchmarking and quality control. As a result 110 suppliers have been refunded a total of approximately £500,000. We have communicated in detail with suppliers to explain where and when these charges should be applied.

NFU President Minette Batters said: “We would encourage any NFU member supplying direct to the Co-op to raise any concerns they may have directly with the GCA. The NFU will assist where possible during the investigation and support our members in this process by providing an additional layer of anonymity if required.

“It is important to note that the GCA will only be able to look at the relationship of direct suppliers to the Co-op.”

Groceries Code Adjudicator Christine Tacon said: “I have previously escalated my concerns with the Co-op as part of my published collaborative approach.

“However, after carefully considering all the information submitted to me, I have decided that an investigation is necessary so I can fully understand the extent to which the Code may have been broken and the root causes of the issues that have been raised with me.

“It is now important that suppliers provide me with information to help my investigation. I am looking forward to hearing what they have to say about whether they have experienced any of the issues now being investigated and if so, the impact on them of the Co-op’s conduct. All information I receive will be treated with complete confidentiality.”

The GCA will also be considering during her investigation the general principle of fair dealing. The GCA will be calling on direct suppliers and others to provide her with more information as part of this investigation.  The call for evidence will close at 4pm on 3 May 2018.