Vendors criticise store code

6 June 2007
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07 June 2007

Suppliers have described a code of practice drawn up to regulate the buying power of supermarkets as ineffective.

They have told the Competition Commission (CC) the Supermarket Code of Practice (SCOP) "had failed in moderating relationships" between retailers and their suppliers.

The SCOP was set up in 2002, in agreement with supermarkets, after a CC review into supplier complaints in 2000. New research by the CC found issues covered by the code, such as delayed payments, had increased in the past year.

Suppliers told the CC they were unwilling to come forward to complain because of fears about their confidentiality and possible retribution. They accused the code of being vague and claimed it was not regularly monitored.

The four major supermarkets told the CC the SCOP "had little impact on the way in which they conduct their business and their relationships with suppliers".

The CC said it did not expect bad practices to stop because of the code, "given that the various practices covered by the SCOP are regulated rather than prohibited". It is expected to announce the results of its grocery market enquiry, launched in May 2006, next February.

SMjun2007

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