Anger as forensic audit saga drags on into next year

Groceries Code Adjudicator Christine Tacon has expressed her sympathy for suppliers angered by the length of time it is taking for major supermarkets to implement an agreement over forensic audits.

In June, Tacon reached an agreement with eight retailers - Aldi, Lidl, Tesco, Asda, Morrisons, M&S, The Co-operative Group and Iceland - to limit the forensic auditing of supplier accounts to the current and two previous financial years. At the time, Tacon hailed the agreement as a major coup for her office as the audits ranked among the top five issues for concern among suppliers.

However, an investigation by The Grocer has found that while some retailers implemented the agreement with immediate effect in June, others have still to do so and, in the case of The Co-operative Group, will not do so until April 2015.

Of the other retailers who signed up to the agreement, Lidl told The Grocer it never actually carried out forensic audits because the simplicity of its processes made it unlikely to lose track of any money in the first place, while Aldi said it was already compliant with the agreement before signing up.

M&S implemented the policy in June, while a letter to suppliers from Iceland in September, seen by The Grocer, said it was now implementing the agreement. Asda said it also implemented the policy in September while Tesco said it would do so over the next few weeks.

Morrisons said it had set the policy in place but that it would be effective from its new financial year, starting on 2 February.

One supplier who received notice this week from The Co-op Group said the delay called into question the effectiveness of the Adjudicator.

“You can bet your bottom dollar that between now and 31 March, The Co-op will have hordes of auditors crawling all over their trading agreements to highlight anything they can possibly unearth, so that when this wonderful commitment comes into force they can sit back happy in the knowledge that they’ve not lost one farthing,” he said.

A spokeswoman for Tacon said: “The Groceries Code Adjudicator expected the retailers to act quickly and she understands the frustration felt by suppliers that some retailers have not yet implemented their commitment.”

A spokesman for The Co-op Group said the reason for waiting until April was that it had to get agreement from all of the other 16 members of Federal Retail and Trading Services, for which it carries out the buying function.