Subscriber login Close [x]
remember me
You are not logged in.

Retailers need to eradicate code breaking measures warns Grocery Code Adjudicator

Published:  05 January, 2015

Major grocery retailers radically need to change the way they work with suppliers and ensure their trading practices in no way encourage members of staff to break the Groceries Supply Code of Practice.

Christine TaconGroceries Code adjudicator Christine TaconThe GSCOP adjudicator has already had success since she took up the role a year ago.

Major grocery retailers radically need to change the way they work with suppliers and ensure their trading practices in no way encourage members of staff to break the Groceries Supply Code of Practice.

That was the stark warning laid down today by Christine Tacon, the Groceries Code Adjudicator, who was speaking ahead of what is expected to be a dramatic change in the way Tesco works with its suppliers when chief executive, Dave Lewis, sets out the retailer's new trading strategy on Thursday.

Tacon told BBC Radio Five Live this morning that retailers need to eradicate any "potential incentives that they might have for people to consider breaking the code".

She added: "It's a cultural thing. This way of trying to get more and more out of suppliers has been going on for a long while now and we have got to start making sure that this is a way of behaving in the future that is always code compliant and that means a cultural change right from the top."

Tesco, however, is set to steal a march over its rivals when chief executive, Dave Lewis, sets out his recovery strategy to the City and press on Thursday with expected radical changes to how it works with its suppliers.

Instead of the current arrangements that are based on a complicated set of rebates, back payments and potential penalties, Tesco is reportedly looking to base future supplier relations purely on volume sales with higher sales leading to cuts in supplier prices, according to the Sunday Times.  

The full details will be revealed on Thursday but could potentially revolutionise the way major grocers work with suppliers in the future and will step up pressure on its major rival retailers to be more transparent and potentially change the way they also work with their own suppliers.

Supplier relations at Tesco have been firmly under the spotlight for the last six months since it revealed a £263 million hole in its profits due largely to rebates from suppliers being moved around to different periods on the company's balance sheet. The revelations have seen Tesco's share price fall 43% in the year to December 2014,

Keywords: