Supermarkets face fines for breaching supplier rules

7 August 2013

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8 August 2013 | Will Green

Supermarkets could face fines of one per cent of UK turnover for breaching rules governing supplier relationships.

This is just one of the sanctions the groceries code adjudicator is exploring under draft guidance, now out for consultation, covering what happens if breaches of the Groceries Supply Code of Practice take place.

The code, which came into force in June, is designed to ensure the 10 largest supermarkets treat their suppliers “fairly and lawfully”.

Groceries code adjudicator Christine Tacon said: “Investigations will be important not only to tackle individual breaches of the code, but also to send out a clear message to the whole sector when particular behaviour is unacceptable. 

“I can only carry out a small number of investigations so, as set out in the guidance, I will want to choose cases with the maximum impact and importance.

“If I do find a breach of the code then there is a range of actions I can take, which can include financial penalties in the most serious cases.

“The work I’m already doing to ensure awareness and observation of the code among retailers and suppliers aims to prevent problems reaching this stage – but it’s important for everyone to know that this is backed up by the sanction of investigations and potential penalties where necessary.

“I need to establish a robust framework that ensures investigations follow a fair and clearly established procedure, so I would encourage all interested parties to let me know their views.”

The consultation closes on 22 October.

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