Unless you’ve been living under a bush, you’ll know that the GSCoP phenomenon is growing. We now have a Groceries Code Adjudicator with the power to fine the supermarkets up to one per cent of their turnover, which, for Tesco, could be over £500 million.
GSCoP is a set of rules that supermarket buyers must, by law, be trained in. It is legislation that states in black and white that supermarkets can only delist a supplier for genuine commercial reasons, with reasonable notice, and in writing, among other such rules. The GSCoP phenomenon is here to stay and has grown from humble beginnings in 2001 when the Competition Commission conducted an investigation into the groceries market and created the ‘Supermarket Code of Practice’.
Some would say that progress has been slow – it’s been almost 15 years from the first investigation to a set of rules with some teeth. Others would say that it’s about time, and there are those who believe that GSCoP is still toothless because the supermarkets are just too powerful. My take on GSCoP is that it was always going to come, it’s taken too long, and that while the government has a responsibility to support the market with fair regulation, we too, as individuals and companies within that market, have a responsibility to play our part. But despite this, over three quarters (76 per cent) of suppliers still have a ‘fair to no’ awareness of the code.
Barristers pass ‘the bar’, heating engineers have to be Corgi registered, supermarket buyers have to be trained in GSCoP, yet suppliers do not – and the result is three-quarters have done little or nothing to become aware. Trading in tens of millions of pounds with no formal training, except health and safety on-site, feels wrong. The Groceries Code Adjudicator, Christine Tacon, has now challenged suppliers via a video to raise their own awareness and train themselves, after her recent annual update shared the low awareness of suppliers, particularly small suppliers, as well as the pressing need to understand the code.
The other important issue is ‘fear of retribution’, with 68 per cent of suppliers saying that this is the reason they would not raise an issue with the GCA. Tacon has continually reaffirmed that confidentiality is assured, but suppliers are still wary.
One supplier said that even if they were brave enough to raise an issue openly, fairly and honestly, and that the issue would be dealt with appropriately, they could still find that they “had an accident” 12 months later. The GCA cannot protect them forever more. This is where the Code Compliance Officers (CCOs) could be useful. Each supermarket, by law, must appoint a CCO, and they are beginning to raise their profile more and more by speaking at events and with videos introducing themselves on the GCA website. The jury is still out as to whether this might be the preferred option by a supplier, but it is definitely less official and early cases seemed to have been dealt with well, with no repercussions.
As an ex-trading manager myself, the very least I would ask for is account managers to know the GSCoP rules, because you cannot choose to call foul play unless you know whether the rules have been broken. Be aware of the code, and introduce yourself to your Code Compliance Officer, at the very least so you can get their advice.
Darren Smith is the founder of Making Business Matter, and his new book, A Complete Understanding of the Groceries Supply Code of Practice, is out this month.
