Around 12% of Asda's suppliers said the grocer rarely kept in line with the Grocery Supply Code of Practice © 123RF
Around 12% of Asda's suppliers said the grocer rarely kept in line with the Grocery Supply Code of Practice © 123RF

Asda named UK's worst major supermarket by suppliers

27 June 2017

Asda has been named as the UK’s worst major supermarket in terms of its treatment of suppliers, according to an industry watchdog.

The annual YouGov survey, of 1,200 suppliers to the UK's biggest grocers and conducted by the Groceries Code Adjudicator (GCA), placed Asda at the bottom of the "Big Four", dropping below Morrisons who came in last place in 2016.

Tesco, Asda, Sainsburys and Morrisons are known in the UK as the Big Four because of their market dominance.

Complaints about Walmart-owned Asda include taking incorrect deductions from invoices with no notice, conducting “abusive” audits of suppliers’ accounts and requesting lump sums to make up profit margin, according to The Guardian.

Around 12% of Asda’s suppliers stated that it rarely if ever kept in line with the Grocery Supply Code of Practice (GSCOP), which applies to 10 of the UK’s largest grocers with annual revenues of over £1bn.

A spokesperson for Asda said the retail chain would be making changes to improve their relationship with their suppliers.

“We’ve listened to the GCA and worked to improve our ways of working with suppliers to ensure we’re doing our job in the best way we can,” they said.

“This includes ensuring our smaller suppliers are paid within 14 days, simplifying our processes and eliminating some of our supplier charges and audits.

“We will also be introducing further changes, including the expansion of a dedicated helpdesk to ensure our suppliers have a single point of contact to raise any concerns.”

Outside of the Big Four, Iceland ranked the lowest of all the supermarkets, with suppliers stating they felt “in a constant state of jeopardy”, fearing their products would be discontinued if they made a wrong move. 

A spokesperson for Iceland said the company had since improved conditions for suppliers in line with GSCOP.

“We have worked hard to improve our compliance to achieve this, and feel sure that this will be acknowledged by out suppliers,” it said.

Overall, the proportion of suppliers who said they had a problem with breaches of the code fell to 56% from 62% last year.

However, the report said incorrect deductions from invoices remained the top problem, affecting 32% of suppliers, followed by data input errors not being resolved promptly.

GCA Christine Tacon, who can issue fines to retailers if they do not comply with the rules, said she was pleased with the overall progress of UK grocers since her appointment four years ago.

Tacon added that she would be continuing as GCA for a further year after figures from a separate YouGov poll showed she had had a major impact on supplier-supermarket related issues, achieving improvements in fairness for suppliers over the past four years.

“Practices are improving and suppliers are getting a better understanding of how I interpret the code in this area and what they can challenge,” she said.

“One of the key areas where delay in payments manifests itself is in incorrect deductions from invoices with or without notice, with 32% of suppliers reporting this an issue in this year’s survey. 

“While this is down from 46% in 2014, this shows me that there is still work to be done in this area and I am right to maintain this as one of my top five issues.”

Tacon named her top five issues as delayed payments, forecasting, promotions, payments for better positioning and ‘pay to stay’.

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