Retailers have a “duty to engage” with suppliers hit by soaring costs in the wake of the Brexit vote, Groceries Code Adjudicator Christine Tacon said today.
The Adjudicator revealed she had approached all the major retailers to point out the unfairness of supermarkets blanking supplier calls for price increases when around 18 months ago supermarkets had called for suppliers to accept prices moving in the other direction, on the back of falling commodity prices.
“I told the supermarkets that they have a duty to engage now that the shoe is on the other foot and it is suppliers coming to them,” Tacon told The Grocer.
Minutes of a meeting Tacon had with supermarket Code compliance officers last month, entitled Brexit and Treatment of Currency Fluctuations, released on Friday, show the Adjudicator urged retailers to engage last month.
“The GCA indicated that a concern had been raised with her that retailers had in some cases within the last two years requested cost price reductions where suppliers had benefited from currency fluctuations or weak commodity prices, but would not now discuss ways to support suppliers where the supplier was affected by recent currency fluctuations following the referendum on 23 June 2016,” says the minutes.
“The GCA gave her view that where a retailer had recently sought to vary a supply agreement in relation to currency fluctuations or developments in commodity prices in the past, it should be open to discuss the issue with the supplier if requested.”
Tacon was speaking to The Grocer this week in the wake of the high profile trading dispute between Tesco and Unilever. Last Wednesday many of Unilever’s leading branded products such as Marmite, PG Tips and Hellmann’s mayonnaise became unavailable via Tesco.com after the retailer refused to accept a demand for a blanket 10% price increase from Unilever. The dispute was resolved on Thursday evening with reports suggesting that Unilever had rowed back somewhat from its original negotiating position. At the time a number of leading supermarket bosses also made it clear that they too would be looking to challenge any supplier requests for price rises linked to currency and commodity fluctuations.
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