The UK's Groceries Code Adjudicator (GCA) has launched an investigation into the Co-op regarding its treatment of suppliers.
The adjudicator, Christine Tacon, says she holds a "reasonable suspicion" that the retailer may have broken the code by de-listing suppliers and introducing benchmarking and depot quality control charges over a period from early 2016 to summer 2017.
Tacon has now decided that an investigation is necessary to "fully understand the extent to which the code may have been broken", and the root causes of the issues as well as their impact on suppliers.
In a statement, the GCA said, 'In particular, the investigation will consider the extent, scale and impact of practices which may have resulted in suppliers being de-listed with no, or short, fixed notice periods unilaterally imposed by Co-operative Group Limited without due consideration of published GCA de-listing guidance.
The focus will be in relation but not limited to decisions taken between summer 2016 and summer 2017 as part of a project called ‘Right Range; Right Store’.'
In response to the investigation, the Co-op says it acknowledges that it has 'fallen short' and has been discussing the two issues raised with the GCA for several months.
The retailer says that it has already taken steps to ensure the fair treatment of all suppliers, and has refunded a total of around £500,000 to 110 suppliers that were incorrectly charged for benchmarking and quality control.
“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," said Jo Whitfield, CEO of Co-op Food.
"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.”
In 2016, the GCA launched an investigation into the UK's largest grocer Tesco, saying that it prioritised its own finances over treating suppliers fairly in a breach of an industry code.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.