New Grocery Supply Code of Practice

15 FEBRUARY 2010 | BY JANE INGRAM, SALES AND MARKETING DIRECTOR

New Grocery Supply Code of Practice and Supermarket Ombudsman announced

The Competition Commission's new Groceries (Supply Chain Practices) Market Investigation Order, has come into effect from February 2010. Its provisions affect all retailers with grocery turnover in excess of £1bn per year in the UK.

The Grocery Supply Code of Practice (GSCOP) has been updated and the Commission has appointed a new Supermarket Ombudsman to monitor and enforce compliance with the Code. The GSCOP covers all grocery transactions, including all food and drink sold for consumption outside the store and all household goods. Fuel, general merchandise and services are excluded.

The full GSCOP can be downloaded from the Competition Commission website. Its key points are listed below:

Information provision:

• The terms of the GSCOP must be incorporated into all supplier agreements and no terms that conflict with the Code are permitted. (Deals entered into before February 2010 are excluded).
• The terms of all retailer-supplier agreements must be recorded in writing, along with any subsequent revisions.
• No agreement is permitted until a suppler has first been informed by the retailer of its rights under the GSCOP (eg: the right to appeal the decision of a primary buyer to his superior).
• Retailers must supply any information required by the OFT in order to monitor compliance with the GSCOP.

New admin procedures

The Code introduces new administrative procedures, including the requirement for training on the GSCOP for buyers and the appointment by retailers of Code Compliance Officers independent from the buying team.

Doing business

The GSCOP also sets more stringent commercial stipulations, covering changes to supply chain arrangements, contributions towards retailer marketing costs and circumstances in which retailers may require suppliers to pay for shelf space.

Payments made by suppliers

Limits and conditions for supplier payments to retailers in relation to promotions and in instances of consumer complaints are also set out.

Delisting

Conditions are given for the delisting of products. These include referral options available to the supplier in the event of a retailer's decision to delist.

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