Co-op found to have breached groceries code of practice

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Co-op code of practice
// Groceries Code Adjudicator found the the Co-op breaded code of practice on two counts
// The retailer failed to provide reasonable notice to suppliers of decisions to de-list products
// Co-op has been ordered to improve its governance, systems, processes and training of staff

An investigation has found that the Co-op had failed to provide reasonable notice to suppliers of decisions to de-list products, and varied supply agreements unilaterally.

The Groceries Code Adjudicator (GCA), Christine Tacon, said the grocery retailer had breached the Groceries Supply Code of Practice on two counts, and found weaknesses in its training, policies and processes for buyers, as well as poor functioning of IT systems.

She has now ordered the retailer to introduce “major changes” to its governance, systems and processes – as well as pay £1.3 million in costs for the investigation.

Tacon, who launched the investigation a year ago, said there was inadequate governance to oversee and manage compliance with the code, and recommended the training on the code for employees who make decisions which affect suppliers.

“The clear conclusion is that Co-op needs to take a very different approach to code compliance,” she said.

“Co-op’s actions were not malicious. It has already repaid those suppliers it has identified as having had charges introduced without sufficient notice and is committed to working with me to change for the better.

“The Co-op has accepted that its focus at the time was on business recovery and it is clear that the code was not embedded into its culture as it should have been.

“It mistakenly assumed that its brand values and desire to work in a certain way meant that it was likely to be acting in accordance with the code and that, if there were any issues with compliance, suppliers would have made the retailer aware of them.”

Jo Whitfield, Co-op’s food chief executive officer, has written to all suppliers to apologise and detail the next steps.

She also said the Co-op refunded £650,000 to suppliers.

“We’ve gone to great lengths to put these things right and have undertaken a root and branch review of all our supplier dealings,” she said.

“We were focused on rescuing the Co-op and doing right by consumers but we should have also given more thought to the potential impact those planned changes would have on our suppliers.

“It is clear we tried to move more quickly than our systems, processes and people could handle.

“We co-operated fully with the GCA during the investigation and have worked hard to fix things as quickly as possible, including refunding over £650,000 to suppliers.”

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