Food and drink suppliers call for Amazon co be regulated by Groceries Code Adjudicator

Amazon. Pic: Paul Faith/PA Wire
Amazon. Pic: Paul Faith/PA Wire
0
Have your say

Food and drink suppliers have called for online giant Amazon to come under the watch of the grocery industry regulator.

Amazon and Boots were the two retailers which received the most requests from suppliers to come under the remit of the Groceries Code Adjudicator, according to its annual survey.

The finding comes as adjudicator Christine Tacon admitted that there is more scope for the Groceries Code of Conduct to cover more than the 12 retailers currently facing scrutiny by the code.

There were calls from 12 grocery suppliers to scrutinise the conduct of Amazon, while 10 suppliers wanted to introduce Boots to the remit of the code. There were a number of other recommendations for retailers including Home Bargains and Booths.

Over the past 12 months, the competition regulator, the Competition and Market Authority (CMA), forced Ms Tacon to scrutinise B&M and Ocado under the code of conduct.

B&M, which recently withdrew its attempt to appeal against the CMA decision, was ranked the worst of the 12 major grocery retailers for its overall compliance to the set of industry standards, according to the survey of suppliers.

Only 25 per cent of suppliers said that B&M met the expected standard of conduct “consistently well”, according to the survey.

Tesco also saw itself slide slightly in a leaderboard of the overall conduct by the retailers, after some retailers commented to say they were “unhappy” about how its multimillion-pound merger with wholesaler Booker led to confusion.

Ms Tacon, inset, said, however, that responses from suppliers have been their best yet, with a significant reduction in the number of suppliers impacted by delayed payments.

The Co-op was the retailer which improved the most over the past year, according to the survey, months after the GCA announced the retailer breached the grocery code.

The survey also highlighted fears from suppliers that they may face repercussions from retailers for raising concerns, after 43 per cent of suppliers said they are not sure if they would actually report issues to the GCA. Ms Tacon, who has now entered her final year in the role, said there is still a significant future for the GCA amid questions over whether it is necessary as compliance officers within retailers take on more responsibility.

She said: “The statutory review is taking place, but I am absolutely sure they will see the importance of the role, because of the positive response we have had from suppliers. We received more survey responses from suppliers than ever. Suppliers don’t want their policemen against bad behaviour being taken away, even if retailer behaviour has significantly improved.”

The UK food and grocery industry is forecast to grow by £24.1bn, or 12.5 per cent, by 2024, bringing the market to a total value of £217.7bn, according to the latest forecasts from research organisation IGD.

Online and discount will contribute almost two-thirds of cash growth and will boost their combined market share from 18.6 per cent to 23.4 per cent over the next five years. Large stores, supermarkets and hypermarkets, will account for half of the market, 50.1 per cent, in 2024.

Simon Wainwright, director of insight at IGD, said: “Growth in the online channel will come from a number of directions. Firstly, newer players are entering the space such as Amazon and meal box operators such as Hello Fresh, Gousto and Mindful Chef.”