Asda accused of bullying suppliers with threats of de-listing

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Asda suppliers

Asda allegedly used “aggressive tactics” to demand suppliers to pay significant sums of money or face being de-listed, a new report has revealed.

The Groceries Code Adjudicator (GCA) investigation by adjudicator Christine Tacon led to “Project Renewal”, which was implemented by Asda in early 2016 and  featured demands for price reductions with suppliers.

Most suppliers were given as little as 24 hours to agree to the changes, while one supplier was only given overnight, and they were  threatened with being de-listed if they did not agree with demands made.

The GCA report added that suppliers were being asked for up to 25 per cent of the annual turnover of the stock keeping unit.

“If they were not successful in negotiating terms on which to remain listed, some reported being given non-negotiable periods of notice of de-listing, with periods of between four and eight weeks being reported to the GCA,” Tacon said.

The investigation also criticised Asda’s use of a third party firm to identify cost savings.

“Providing incentives to third parties to generate income or cost savings for the retailer may encourage behaviour inconsistent with [Groceries Supply Code of Practice] code compliance and the retailer‘s values,” Tacon said.

The GCA said although Project Renewal was not conducted in a ‘wholly code-compliant way‘,  it would not be launching a formal investigation into Asda‘s behaviour as the grocer had “proactively engaged with suppliers to rectify any lump sum arrangements, which should not have been made”.

Asda code compliance officer Sarah Dickson said the grocer took its responsibilities seriously.

She said buyers were given new training and it had stressed a commitment to full compliance with the Groceries Supply Code of Practice.

“We have also reduced our payment terms for small suppliers to 14 days and our larger suppliers are testing good faith receiving,” she added.

Dickson also urged suppliers to raise any concerns they had with her.

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4 COMMENTS

  1. Asda like Tesco will adopt Codes of Practice until the cows come home, but in secret negotiation always pressurise those suppliers with whom they believe they can drive costs down, particularly when alternatives, irrespective of source are available.
    There is no way that certain sections can be supplied competitively from the UK as in, for instance, some clothing from the Far East. Asda and others will insist that it’s suppliers meet with their codes of practice but there is no way they can monitor the sub contract or conditions that apply. Animal husbandry in some parts of the EU. let alone the rest of the world, are far less observed than in the UK and recent scares in both meat and egg supplies demonstrate.

  2. Dreadful behaviour, that buyers need to be told that it is wrong to demand payment for orders – also know as a bribe. No mention of senior managers being reprimanded or sacked for the policy and nothing from CIPS about its members breaking basic ethical codes.
    Everyone knows that this is wrong and Asda and others have no excuse, their claim that they can’t monitor their supply chain is an admittance that their supply chain is broken, why have they set up something that they can’t monitor for quality and consistency? Another reason why I don’t use them

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