The Groceries Supply Code of Practice (GSCOP) could cause issues for independent retailers supplied by multiple-backed wholesalers such as Nisa, Booker and Morrisons, according to retail experts.
The Groceries Code Adjudicator’s (GCA) GSCOP regulates how the UK’s 10 biggest grocery retailers trade with suppliers. For example, unlike independents, major retailers must provide sufficient notice
if they choose to alter an existing supplier contract’s terms or order volumes, or face fines up to 1% of their annual turnover.
Those signed up to the code are Asda, Co-op, M&S, Morrison, Sainsbury’s, Tesco, Waitrose, Aldi, Iceland and Lidl. Last week, a GCA investigation found Co-op guilty of breaching the code by delisting products and altering agreements without giving prior notice to suppliers.
It is the first GSCOP breach judgement since major involvement of multiples in the supply of the independent convenience sector began, and, according to experts, raises questions of how they can meet the uncontrollable fluxes in demand related to supplying third parties.
Last year, the rollout of Tesco goods into Booker stores, Morrisons’ goods into McColl’s stores and Co-op goods into Costcutter and Nisa stores were all delayed by GSCOP terms.
Norwich Business School retail expert Andrew Fearne told RN GSCOP creates “scope for independent retailers” not affiliated to multiple retailers.
“The supply chain is complicated by the fact there is a link with wholesalers to independent retailers. Independent retailers are relying on their wholesaler to support them and the decision to source is taken by the wholesaler,” he said.
“They must stock the products their symbol groups decide to offer them. The GCA’s principles apply to any business following the GSCOP rules.”
GlobalData retail analyst Thomas Brereton added: “The code is there to stop relationship abuse. Tesco and Booker is unique because of their size, and Morrisons and McColl’s is interesting because they’re so closely linked in the supply chain. Suppliers feel like they’re under pressure and the GCA will be looking at these relationships closely.”
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