We thought you would be interested to hear about the launch of the first formal investigation by Christine Tacon, the Grocery Supply Code of Practice (GSCOP) adjudicator in the UK. As you may know, Ms Tacon has faced criticism since the creation of the adjudicator role in early 2013 for an apparent lack of enforcement activity, but her office gained prominence at the time of the Tesco accounting issue, when she wrote to the company to request that GSCOP compliance issues be included within the scope of its internal investigation. Ms Tacon is now satisfied that the test for launching a formal investigation into Tesco has been met and her investigation will focus on alleged delays to payments made to suppliers and also payments allegedly made by suppliers to secure better shelf positioning (outside of promotional periods).
The adjudicator has often commented on the difficulty of taking successful enforcement activity in the absence of reliable information from suppliers and she has emphasised her duty to protect the anonymity of such complainants. Today, she repeated her request for suppliers to come forward if they have evidence of retailers breaching the Code.
As things stand, the adjudicator's powers are limited to naming and shaming retailers and to recommending improved practices for the future. But last week the UK government published plans to give the adjudicator the power to fine retailers up to 1% of their annual UK turnover. In reality, given the changing retail landscape and the growing competitive threat from the discounters, the immediate adverse reputational harm of being caught in the adjudicator's spotlight may be more of a deterrent than the risk of a fine. So far that deterrent effect has led to retailers changing their behaviour before any formal investigation was initiated.