Co-op Group admits shortfalls in treatment of suppliers

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The Co-op Group has acknowledged it has fallen short in its treatment of suppliers after becoming the subject of an investigation by the Groceries Code Adjudicator (GCA).

Christine Tacon, the GCA, has launched an investigation into the group after forming “a reasonable suspicion” that the retailer may have broken the Groceries Supply Code of Practice (the Code).

The GCA said the retailer may have broken the Code through practices relating to de-listing and the the introduction of benchmarking and depot quality control charges over a period from early 2016 to at least summer 2017.

The Co-op said it had been in discussions with the GCA over the two issues, and had taken “decisive steps in line with its commitment to ensure the fair treatment of all its suppliers”.

The actions taken so far include:

  • Strengthening its systems and processes for the future
  • Retraining 450 employees in the operation of the Groceries Supply Code of Practice
  • Writing to all 1,500 direct suppliers to “seek information on any delisting decisions that they believe may have been taken without appropriate consultation”
  • Reviewing every case where a supplier was charged for benchmarking and quality control, resulting in a refund of approximately £500,000 to 110 suppliers.

Co-op Food ceo Jo Whitfield said: “We care deeply about our relationships with our suppliers and we are very sorry that in these two areas we have failed to live up to our usual high standards.

“We are already addressing the issues with the GCA and our suppliers and we hope the investigation will help bring to light any additional cases so that we can put these right as quickly as possible.”

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 oversees the relationship with large grocery retailers and their suppliers.

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