Grocery giant Co-op has become the target of an investigation by an industry regulator over its treatment of suppliers.
According to the Groceries Code Adjudicator (GCA), a supermarket regulatory body set up to ensure large supermarkets treat suppliers fairly, the retailer is suspected of breaching GCA rules in the way it de-listed its suppliers.
The investigation is being spearheaded by Christine Tacon, whose only other full-scale investigation was into Tesco 2014 accounting scandal.
Should Co-op be found to have breached the code, it could be forced to pay a fine of up to one per cent of its annual turnover. In 2016 the Co-op’s food arm made total sales of £7.1 billion, meaning a fine could cost the retailer £71 million.
“In particular, the investigation will consider the extent, scale and impact of practices which may have resulted in suppliers being de-listed with no, or short, fixed notice periods unilaterally imposed by Co-operative Group Limited without due consideration of published GCA de-listing guidance,” Tacon said.
The Co-op has admitted it had “fallen short” and has already paid out £500,000 in refunds to suppliers.
Chief executive of Co-op food added Jo Whitfield added: “We care deeply about our relationships with our suppliers and we are very sorry that… we have failed to live up to our usual high standards.
“We are already addressing the issues with the GCA and our suppliers and we hope the investigation will help bring to light any additional cases so that we can put these right as quickly as possible.”