The Co-op has written to 1,500 suppliers asking about delisting decisions © Co-operative Group Limited
The Co-op has written to 1,500 suppliers asking about delisting decisions © Co-operative Group Limited

Co-op refunds £500,000 to suppliers over unfair charges

The groceries code adjudicator (GCA) has launched an inquiry into the Co-operative Group amid concerns over delisting of suppliers and unfair charges.

GCA Christine Tacon said she had a “reasonable suspicion” that the retailer had breached the Groceries Supply Code of Practice (GSCOP) by delisting suppliers with no, or short, notice periods and introducing depot quality control and benchmarking charges without reasonable notice.

In response the Co-op said it had “fallen short” and refunded 110 suppliers a total of around £500,000 for charges imposed for benchmarking and quality control. It has also written to all its 1,500 direct suppliers seeking information on delisting decisions taken without appropriate consultation. “A small number of suppliers have raised concerns which we are working through with them,” said the firm.

The investigation covers the period from early 2016 to at least summer 2017.

Tacon said: “I have previously escalated my concerns with the Co-op as part of my published collaborative approach.

“However, after carefully considering all the information submitted to me, I have decided that an investigation is necessary so I can fully understand the extent to which the code may have been broken and the root causes of the issues that have been raised with me.

“It is now important that suppliers provide me with information to help my investigation. I am looking forward to hearing what they have to say about whether they have experienced any of the issues now being investigated and if so, the impact on them of the Co-op’s conduct. All information I receive will be treated with complete confidentiality.”

The Co-op said it was retraining 450 commercial employees in the operation of GSCOP.

Jo Whitfield, CEO of Co-op Food, said: “We care deeply about our relationships with our suppliers and we are very sorry that in these two areas we have failed to live up to our usual high standards. We are already addressing the issues with the GCA and our suppliers and we hope the investigation will help bring to light any additional cases so that we can put these right as quickly as possible.”

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