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Supermarkets to face fines for mistreating suppliers

Supermarkets to face fines for mistreating suppliers

Supermarkets in the UK could be facing fines if they mistreat their suppliers, according to Christine Tacon, the new groceries code adjudicator, who began her role earlier this week.

Contract disputes and complaints from suppliers will be investigated by the body and it will be able to impose fines on firms that are found to be treating goods providers unfairly, as well as forcing the offending supermarket to apologise publicly.

Ms Tacon has been installed to oversee the legally binding code of practice that governs the way large chains with a turnover of more than £1 billion work in the UK, which includes the like of Tesco, Sainsbury's and Asda.

Her role has been created to prevent changes part-way through contracts between retailers and their suppliers, covering groceries including food, drink and toiletries, but not clothing or tobacco.

Ms Tacon said her first job will be to recommend the rules under which investigations would occur and develop a system of appropriate fines, as well as the maximum penalty that could be handed down to a supermarket that breaks the code of practice.

Ahead of her appointment she told the Guardian: "Everyone is frightened and they don't feel they can complain. This code of practice is law but it can be the case that nobody at senior level within a retailer knows about anything going wrong."

Andrew Opie, director of food and sustainability at the British Retail Consortium, said: "We're ready to work with the adjudicator, it's important we have a constructive relationship."

Mr Opie stressed the adjudicator needed to make it clear that the scope for submitting complaints would be limited to direct suppliers of supermarkets and not the entire supply chain.

"Unfortunately, for whatever reason, whether it's communications from pressure groups or discussions in parliament, the expectations have been raised."

The move has not been welcomed by the companies in the spotlight, with Justin King, chief executive of Sainsbury’s recently saying consumers do not need protecting from supermarkets.

 

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