28 February 2008
Supermarkets with a turnover of more than œ1 billion will be subject to a new Groceries Supply Code of Practice (GSCOP), introduced by the Competition Commission.
The code will provide increased protection for suppliers and replaces the much-criticised Supermarket Code of Practice (News, 7 June 2007
An ombudsman will mediate in disputes and investigate retailers' records if suppliers complain. If the GSCOP is breached, the ombudsman will be required to report them to the Office of Fair Trading.
Grocery firms will also be required to appoint an in-house compliance officer to ensure that clear records of supplier contracts are maintained and communication with suppliers is open.
The recommendations follow the commission's investigation into allegations that retailers might be damaging the supply chain by transferring excessive risks and uncertain costs to suppliers.