Christine Tacon has announced this will be her final year as Groceries Code Adjudicator (GCA) as she sets out an approach to drive effective top-to-bottom compliance risk management by the retailers she regulates.
Tacon is to step down from her role at the end of her current term in June 2020 and explains she is committed to working with each of the 12 large retailers to ensure all their practices, systems and behaviours are designed and structured to meet their obligations under the Groceries Supply Code of Practice.
The GCA is an independent statutory office responsible for enforcing the Groceries Supply Code of Practice and to regulate the relationship between supermarkets and their direct suppliers within the United Kingdom.
She told the 2019 GCA Annual Conference: “I am introducing a common factors approach to guide their compliance risk management activity.
“However they are set up, I want to see the retailers build for themselves a whole-organisation approach to Code compliance.
“This puts their compliance management thinking into their overall governance structures, their legal and audit functions as well as their internal systems and processes, into their training and their communication with suppliers.
“This is the best way to make sure that breaches of the Code don’t happen and if they do, that they are quickly picked up and put right. It means retailers doing the right thing not only because that is what is required of them, but because it makes good business sense.”
Groceries Suppliers Code of Practice survey
Tacon set out her vision after her annual Groceries Suppliers Code of Practice survey revealed continuing improvement in retailer behaviour.
For the second year running, only four out of ten suppliers reported having experienced an issue at any point in the year – an achievement in a year when two new retailers were added to those she regulates.
Last year’s top concern for suppliers – delay in payments – fell from 19% to 13% in a period when the retailers’ response to the issue was under formal monitoring by the GCA.
Forecasting is now the issue most reported by suppliers – and that, too, has continued to decline.
In addition, Co-operative Group Limited topped the table as the biggest improver after significant scrutiny from the GCA following a year-long investigation which found that the retailer had breached the Code.
The Adjudicator also said she would be examining how the Code should apply to the various buying alliances, joint ventures and merged entities run by the regulated retailers, which she said was important because arrangements of these kinds were increasing in the groceries sector.
She announced that she had secured agreement from Waitrose and Ocado to the voluntary commitment achieved with 8 of the original 10 retailers in 2014 to limit forensic audits to the current year plus two.
Ms Tacon commented on the debate about whether the role of the GCA should be extended, whether up the supply chain or to cover things the Code is not currently designed to address.
“I am clear in my own mind that it would mean significant change in the way the work of the GCA is done. The levy funding model would have to be altered, so a few large retailers were not paying for the GCA to regulate arrangements over which they had no direct control.
“The collaborative approach I have established would not have been possible with a much larger cohort of regulated businesses, or if my job were to champion individual supplier issues or causes.
“And thought would have to be given to the fit between any new price-based measures and the competition position underpinning everything the GCA is currently established to do.”
The GCA Annual Survey 2018 revealed that Aldi was ranked top by suppliers in terms of overall compliance with the Code for the 5th year in a row.
Overall, 97% of Aldi suppliers surveyed said Aldi complied with the Code ‘Consistently or Mostly Well’. Of these, 58% rated them at ‘Consistently Well’, 15% better than the next placed Grocery Retailer.
Julie Ashfield, managing director of Buying at Aldi, said: “We are incredibly proud to have topped the GCA’s annual survey every year since its inception six years ago. This reflects the close relationship we have with suppliers, which is built on mutual trust and understanding.
“The partnerships we have established with our suppliers over many years allow us to source the very best products for our customers.
“As we move towards our long-term target of 1,200 stores by 2025, this presents an opportunity for our suppliers to grow with us too. We currently source from more than 1,000 British businesses and look forward to working with many more in the coming years.”