Asda has given FPJ and freshinfo its response to criticism of its own response to the Competition Commission's investigation of the UK grocery market.
Asda stirred up controversy with its latest response to the Competition Commission, saying it does not think a UK supermarket code of practice should apply to overseas suppliers.
Asda’s response to the commission’s provisional decision on remedies is: “Overseas suppliers should be excluded from the [proposed] groceries supply code of practice. Such suppliers are likely to be supplying retail customers in other jurisdictions, but the commission cannot impose a remedy on those customers. As a result, there is only limited impact on the allocation of risk/ cost the commission is seeking to remedy.”
In a report in the Guardian on April 7, anti-poverty campaign group ActionAid accused Asda of failing to show the right ethical credentials in the face of the Competition Commission enquiry into the UK grocery sector.
But Paul Kelly, director of corporate affairs at the UK retailer, told FPJ the article is “misleading”. “It gives the impression that Asda doesn’t want to have an ethical code that applies to overseas suppliers. This is simply not the case. We are committed to ensuring all of the goods that we sell are produced without exploitation and in acceptable working conditions. We have been active members of the Ethical Trading Initiative (ETI) since 1998, and as such our ethical trading policy is closely aligned to the ETI’s base code.”
The existing code of practice does apply to overseas contractors, but only if they are direct suppliers and no middleman is used.
Jenny Ricks, corporate campaigner at ActionAid, said: “Faced with a true test of their ethical credentials, Asda have failed miserably. Their response clearly shows why we urgently need sensible regulation that will ensure supermarkets clean up their supply chains overseas…We urge Asda and other supermarkets to prove they are serious about cleaning up their act by accepting the commission’s remedies and stop fighting proposals that would help poor workers overseas.”
Asda believes, however, that its credentials in this area are already strong, and that the additional administrative burden of applying the groceries supply code of practice overseas would outweigh any benefits. “Alongside Wal-Mart, we employ more than 200 ethical trading managers throughout our business to communicate and co-ordinate our ethical trading policy, chiefly by assessing our supply base and ensuring we audit our suppliers in line with the ETI base code,” said Kelly.
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