Amazon accused of continuing last-minute supplier delists despite GSCOP designation

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Amazon said it wanted to build successful long-term relationships with suppliers

Amazon is continuing to routinely delist suppliers with as little as 24 hours’ notice, despite having come under the jurisdiction of the Groceries Code Adjudicator since the start of last month.

While it is said to have taken some “positive steps” to align its buying practices with that of other supermarkets policed by GSCOP, suppliers told The Grocer they were still facing what they claimed was a lack of notice over delistings, as well as demands for payments some experts claim are outside the scope of the code.

Suppliers also said they were “dismayed” to see supplier helplines set up by Amazon to improve communication being run by the same senior buyers whose tactics are coming under scrutiny.

In February the Competition & Markets Authority announced Amazon was to be brought under GSCOP due to its “increasing activity in the UK groceries’ sector”, which had seen it reach the £1bn from grocery sales needed to qualify for designation.

“With Amazon becoming GSCOP liable since 1 March, many brands had high hopes this would change how Amazon approaches their relationship,” said Martin Heubel, founder of London-based e-commerce strategy consultancy Consulterce, and formerly a senior Amazon category manager.

Instead, Heubel said “vendor managers removing products from the range at short notice continues to be the norm rather than the exception”.

Heubel said while Amazon had been adhering to GSCOP’s demands to give retailers notice for delists, those periods were often ranging “between 24 and 72 hours”.

GCA Mark White urged suppliers in February to come forward with issues with Amazon. Experts predict the subject of delistings is likely to provide a major test of the code, which says suppliers must be given ‘sufficient’ notice but is vague over exactly what that entails.

Suppliers told The Grocer there had been some “positive steps” from Amazon since its new status was confirmed, including the appointment of the general counsel of its management team Alex Simpson, a former long-time lawyer at Asda, to become its code compliance officer.

Amazon has shared his contact details with all its vendors, as well as those of senior category buyers and supplier helplines.

British Brands Group director John Noble described the move as a “positive first step” that would “open the floodgate for thousands of suppliers to contact Amazon, when historically human contact has been difficult”.

However, Noble said Amazon was continuing with practices such as demands for damage allowance and marketing spend, which were out of sync with GSCOP.

“Damage allowance tends to be mandatory, with currently limited detail presented to vendors on what it covers,” he said.

“GSCOP has specific provisions for wastage and shrinkage, with charges being appropriate only where fault lies with the vendor.

“Marketing spend is a further area where vendors may reasonably expect greater clarity and transparency. What will they receive for what they are being asked to pay? If that is unclear, and if marketing spend remains a mandatory requirement for trading on Amazon, might that be interpreted as a listing fee, an area regulated under the code?”

Another source said they had concerns over the new helplines, noting: “The names of senior buyers and those on supplier helplines are the same.

“This is far from ideal. The purpose of supplier helplines is to resolve financial issues away from the commercial team.”

One supplier told The Grocer Amazon had made demands for a 2% fee for any products wasted and another 2% towards marketing spend.

“We had been trying to get through a cost price increase after months of negotiations, but these were the conditions they set and it effectively meant any cost increase would be completely wiped out.”

Amazon said its delisting notice period varied “depending on the circumstances of each case”.

It also said it negotiated support for marketing and allowances for damaged inventory, and arrangements were “made in line with GSCOP”.

It said it was required to provide contact details of its vendor managers in communication with suppliers.

“We want to build successful long-term relationships with our suppliers, and we welcome feedback,” said a spokesman.

“If a supplier has an issue they would like to raise and they don’t feel comfortable raising that with our retail team, they can contact Amazon’s code compliance officer at codecomplianceofficer@amazon.co.uk – these contact details are provided on Vendor Central and are available on the Groceries Code Adjudicator’s website.

“The code compliance officer is completely independent of Amazon’s buying teams and will treat any information shared by suppliers as confidential. We will continue to work closely with our suppliers to help them grow their business and reach customers in the UK and around the world.”