Christine McDowell, NFU Food Chain Adviser, shares her views following the annual Grocery Code Adjudicator conference. She writes:
During the conference, Christine showed there has been a change in culture from the top 10 retailers, where reports of supplier’s experiencing breaches of the Grocery Supplier Code of Practise (GSCOP) dropped from 79% to 43% since 2014.
Aldi remained for the 5th year running the most compliant retailer according to the supplier survey, with Tesco and Morrison’s topping the ranks of most improved. It’s not surprising as both these (as well 3rd and 4th most improved ASDA and Co-op) all had case studies and arbitrations against them.
It’s clear from the evidence gathered from the supplier survey that Christine’s collaborative approach works and is much more powerful than arbitration or investigations (however there is a role for both as a last resort). Specific areas of concern for suppliers have previously been Forensic Auditing, Consumer Complaints, Margin Maintenance and Artwork and Design Services; all of which have significantly reduced.
This doesn’t mean the GCA has taken her eye off the ball; the success of her office depends on suppliers raising Code related concerns, and I personally would urge members to continue to raise issues with both the NFU and the GCA, in strict confidence. Delays in payments and forecasting errors will continue to be monitored.
Code Compliance Officers have a critical role to play in tackling the fear from suppliers of reputational damage for raising issues. These officers work independently of the buying function within the retailers to tackle any breaches of the code and have a close working relationship with the Grocery Code Adjudicator.
Delays in payments continue to be a concern for suppliers. To further aid this all retailers have set up “supplier helplines”. This allows for suppliers own finance departments to speak directly with the retailer finance departments on issues such as invoicing errors, allowing suppliers to by-pass the buyers.
The GCA told us that Code Compliance Officers have on occasion, stood up for the suppliers by paying compensation without buyers knowing about it. This will go a long way in breaking down the culture of fear. I’d urge suppliers to make use of Code Compliance Officers and the Supplier Helplines in resolving disputes, details of both can be found HERE.
I was pleased to see that the GCA give clarity on best practice on forecasting and promotions, including taking due care when ordering for Promotions. It was made clear, that retailers cannot claim that a forecast was produced with due care, if the supplier didn’t have an opportunity to have an input. As a result, compensation may be due if the supplier suffers when orders differ significantly from the forecast.
The GCA has found that typically, forecasting issues are linked to promotions, such as changes to the agreed number of stores running the promotion, position on shelf (gondola end or not) and even buyers ‘forgetting’ to upload promotions onto the retail system.
The future of the Adjudicator role and the Code it enforces is exciting. The Competition and Markets Authority (CMA) are reviewing the process to allow more grocery retailers under the remit of the GSCOP and the GCA. The NFU have lobbied hard for this and so are pleased the CMA will review this; with an ever changing retail landscape and the continuous pressures they face, there has never been a more important time. The NFU will be looking to ensure this review is fit for the future.
Overall, the GCA conference is one of those “must be there” events. It’s a fantastic way to learn about the GCA, speak to her afterwards confidentially and network with suppliers and industry stakeholders. I caught up with colleagues from the Norwegian Farmers Union, after the event who had come to the UK for the conference to learn more.
Their Government are looking to bring in a similar body to the GCA so it was an opportunity to discuss their policy. It’s also a great opportunity to bring another perspective to the table, as I also gained insight into the Irish version for our GCA, from the Irish Farmers Union and to discuss the upcoming European Unfair Trading Practice Directive – which the NFU continues to raise the profile on.
Remember, NFU members supplying direct to the 10 regulated retailers can save a significant amount on GSCOP training, through NFU training courses. These are one day courses, designed to be practical using real life case examples. The course helps you to understand how the Adjudicator interprets the Code, giving you the confidence to address Code related issues in a proactive and confident manner. Click here to find out more.
All regulated retailers by law must be trained in the Code. For you and your business to be Code Confident; “Get Trained, Know the Code and Speak Up”.