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Groceries Code Adjudicator launches financial investigation

Member: Nifa

Chief Executive of the Groceries Code Adjudicator (GCA), Christine Tacon, has announced a full investigation into the Co-operative supermarket’s treatment of its suppliers. The GCA said the retailer may have breached the Code through practices relating to de-listing and the introduction of benchmarking and depot quality control charges over a period covering early 2016 to at least summer 2017.

According to Ms Tacon, the decision was taken after she had escalated her concerns with the Co-op. The GCA has decided that an investigation is now 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.

Ms Tacon added that she now needs more information from direct suppliers and others to determine whether the Code has been broken and if so, what further action to take. It is possible that the supermarket could be fined up to one per cent of its annual turnover if it is found to have broken the Code.

This is only the second full-scale investigation undertaken by the GCA, the first being its year-long enquiry into Tesco after its 2014 accounting scandal. In Tesco’s case, the Adjudicator found that the retailer had acted unreasonably when delaying payments to suppliers and considered the breach of the Code to be serious.

As well as Ms Tacon ordering Tesco to “make significant changes” to its dealings with suppliers, she ordered the store to pay £1 million towards the cost of the investigation. 

The investigation into the Co-op will include sifting huge amounts of evidence from suppliers and the supermarket itself, as well as interviewing personnel and other key individuals. It will also include scrutiny of the accounts by forensic accountants, in order to ascertain what has been paid and when.

Author: Roger Isaacs 9 March 2018

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