With rising inflation, retailers have reportedly received unprecedented numbers of requests for cost price increases (CPIs) from suppliers. We've got some recommendations from the GCA on how to best deal with CPIs.
As a result, Mr White has published a set of ‘golden rules’ based on examples where retailers have dealt with CPI requests well.
- Clear communication from the outset by retailers about the process and how long it will take.
- Awareness, and prioritisation, of the possible greater impact on smaller suppliers.
- Support for buyers from colleagues who have experience of dealing with CPI requests.
- Only asking for the specific information from suppliers that is needed to make a CPI decision.
- Clear communication of the outcome, so there can be no grey areas.
- No automatic delists or fixed delist notice periods following CPI negotiations.
- Reminding buyers about abiding by competition law, eg, never asking suppliers about other retailers’ plans or retail prices.
Concerns about requests
Mr White urged suppliers to come forward with information if they have any concerns about the way their requests are being handled, particularly in cases where retailers are suspected to be in breach of the Grocery Supplier Code of Conduct.
Fairness and transparency
NFU Food Business Relationships Adviser Annabel James said: "During these difficult times, when additional stress is put on farmers and growers, it is vital they are able to operate in fair and transparent supply chain.
"We also encourage suppliers to complete the GCA annual survey before 27 February. This is a key opportunity to provide information on your experiences with retailers."
You can contact the GCA and find out more about the survey on the government's Groceries Code Adjudicator page.