Tougher supermarket regulations come into force

04 February, 2010

Supermarkets today face the implementation of new regulations monitoring their dealings with suppliers, known as the Grocery Supplier Code of Practice (GSCOP).

Under the new code of practice, activities outlawed include changing supplier terms retrospectively and asking suppliers to fund promotions, such as two-for-one deals.

Suppliers will no longer have to cover the cost of items that have been stolen, and they will have recourse to independent arbitration in the case of a dispute.

Supermarkets will have to keep written records of their dealings with suppliers.

The regulations cover the 10 largest supermarkets, all those with annual turnovers greater than £1bn.

Consumer Minister Kevin Brennan said the new code would be a “great improvement” on the current system.

The National Farmers Union “welcomed the new code of practice to stop bully-boy tactics”.

The government is considering the introduction of an ombudsman to monitor the new code of practice, which it will report on in 12 weeks time.

However, Malcolm Walker, chief executive of supermarket chain Iceland, described both the code of practice and the proposals for an ombudsman as “a complete waste of time. We will do the minimum for compliance reluctantly because we have to”.

The code of practice follows an investigation by the Competition Commission in 2008, concluding that tougher regulation was needed in relations between large retail groups and their suppliers.

Subsequently the Commission recommended in 2009 that an ombudsman be introduced to levy penalties on non-compliant supermarkets.

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