Co-op investigated over delisted suppliers and unfair charges

The Co-operative Group is the subject of an inquiry by the Grocers Code Adjudicator (GCA)…...

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The Co-operative Group is the subject of an inquiry by the Grocers Code Adjudicator (GCA) over claims that it delisted suppliers and introduced charges to its supply chain without due notice.

Christine Tacon, leading the investigation on behalf of the GCA, said that she had reason to suspect that the Co-op had breached the Groceries Supply Code of Practice (GSCOP). The Co-op responded by admitting that it had “fallen short” and has refunded approximately £500,000 to 110 suppliers that were unfairly charged over benchmarking and depot quality control.

The organisation has also contacted its 1,500 direct suppliers to ask if they have concerns regarding delisting decisions taken without due notice or appropriate consideration. According to the Co-op, a small number of suppliers have responded with concerns and these are being dealt with.

If found guilty, the Co-op may have to pay a penalty of up to 1% of its £7bn annual turnover, meaning a fine of over £70m is possible. The inquiry will cover a period from early 2016 to the summer of 2017 (and possibly beyond).

Tacon asked suppliers to come forward with information. She assured them that if they had experienced any of the issues that were the subject of the investigation, then any concerns raised would be dealt with in complete confidentiality. The Co-op is retraining 450 of its commercial employees in the Groceries Supply Code of Practice.

Co-op Food CEO Jo Whitfield said that the organisation cared deeply about supply relationship management and apologised for failing to meet its usual high standards in these particular areas. She added that the Co-op was already addressing the issues raised, and was working alongside their suppliers and the GCA to uncover any additional cases in order to put them right as soon as possible.

Steve Trainor

Steve has over 28 years of success as CPO, MD and Procurement BPO leader in a range of industries. Steve is COO at Odesma, responsible for Odesma’s delivery capability & infrastructure.

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