Supply chain · 18 October 2016

Government pledges to protect smaller UK supermarket suppliers

supermarket-suppliers
The GCA was set-up in 2013 to deliver independent scrutiny into compliance of the Groceries Code

The government has launched a review into the practices of the UK’s ten largest supermarkets, with the aim of protecting small suppliers and encouraging innovation in supply chains.

Small business minister Margot James has opened a statutory review of the Groceries Code Adjudicator (GCA), a body set up to provide security for small, independent suppliers when dealing with large supermarkets. The GCA was set-up in 2013 to deliver independent scrutiny into compliance of the Groceries Code.

Statistics have suggested that the GCA has had a positive impact so far. YouGov reported an eight per cent decrease in code-related complaints by small suppliers in 2015, and a 17 per cent decrease since 2014.

Commenting on the opening of the review, small business minister Margot James spoke of the success of the GCA in fulfilling its purpose in ensuring “suppliers of all sizes get a fair deal when working with supermarkets”.

“The GCA is making a significant impact, with suppliers reporting that nine out of the ten retailers covered have improved their compliance with the code over the past year,” she said in a statement.

However, James also acknowledged the need to widen the scope of the GCA to include indirect suppliers to supermarkets.

“We are looking at evidence for extending the GCA’s remit in recognition of concerns raised by other suppliers in the grocery sector – particularly primary producers and farmers – who are not covered by the code.

“The government wants to do all it can to help these business owners, and we look forward to hearing their views and those from across the sector.”

Small UK suppliers that may previously have struggled for negotiating power when dealing with supermarkets have been encouraged to take advantage of weaker exchange rates. Relationships between chains such as Tesco and major European suppliers like Unilever have recently broken down.

Ian Cass, managing director of the Forum of Private Business (FPB), has said in a statement: “For too long major retail outlets have squeezed small suppliers both on terms and price, in favour of multinational suppliers like Unilever.

“The impact of that strategy is now starting to bite and we are calling on large UK retailers to open their delivery doors to small UK producers once again, on transparent terms and prompt payment.”

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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