Groceries Code Adjudicator Christine Tacon will reveal a breakthrough on behalf of suppliers at the inaugural GCA conference today, after she persuaded eight supermarkets to slash the time they will backdate demands for money from six years to two.
Tacon said the practice of “forensic auditing”, whereby retailers go back years to analyse accounts and records to search for money that might be owed to them by suppliers, was the number-one issue suppliers had complained about last year.
“This is a major change from the previous position where both retailers and suppliers were looking for missed invoices and payments going back up to six years”
Christine Tacon
She added she was “delighted” by the voluntary commitment made by Aldi, Asda, The Co-op, Lidl, Iceland, M&S, Tesco and Morrisons to restrict the practice to the current and two previous financial years.
“Eight of the large retailers have taken on board the concerns I voiced about the impact on suppliers, particularly small suppliers, of being asked for sometimes significant sums of money several years after they have closed their accounts for any particular year,” said Tacon.
Read our full interview with Christine Tacon
“This is a major change from the previous position where both retailers and suppliers were looking for missed invoices and payments going back up to six years – even longer in some circumstances. Each retailer will now set out how they will implement this commitment.”
The conference also saw the release of the GCA’s first annual report, detailing the issues suppliers and others have raised with the adjudicator. These issues will be the starting point for the work carried out by the GCA over the coming year.
As well as forensic audits, the issues included discrepancies between what suppliers say they have delivered and what the retailers say has been received; forecasting and service levels; requests for lump-sum payments, and packaging and design charges.
Speaking to The Grocer ahead of her speech, Tacon said the voluntary commitment showed that progress could be made without the need for “antagonistic” investigations.
GSCOP ‘working well’
A spokesman for the BRC said: “We are pleased to see that the first year of the adjudicator’s work has not exposed major failings, which supports our belief that supply chains are more collaborative than was originally suggested and that the introduction of the Groceries Supply Code of Practice in 2010 is working well and has formalised relations between retailers and suppliers.”
“We need to be careful to separate anecdotal responses from evidence-based reporting and whilst there are issues raised in the report the adjudicator has yet to establish if there is evidence to support them. Retailers are very happy to support that process and have already been working constructively with the adjudicator on a range of issues over the year.
“The report actually highlights that a lack of awareness remains the priority, particularly ensuring that suppliers understand what constitutes a contract, the remit of the adjudicator and the scope and application of GSCOP. We know the adjudicator is working hard to improve that and trust this will avoid misunderstanding and unnecessary concerns in the future.”
Read our full interview with Christine Tacon
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