The Office of Fair Trading website reports that Sainsbury’s has written to its suppliers in dispute over new payment terms, to inform them of flexibility in the implementation of those terms.
In January Sainsbury's wrote to a large number of its suppliers to say that its payment terms would be changed as from March 7. Following negotiations, the supermarket chain is writing to those suppliers in dispute over the new terms to say that, pending dispute resolution, they will not implement the new terms on the said date.
The OFT said today (Wednesday) that it had discussed the matter with the Fresh Produce Consortium (FPC) and the National Farmers Union (NFU), on behalf of the respective organisations’ supplier members.
“Where suppliers and supermarkets cannot resolve disputes by negotiation, the OFT encourages use of the mediation procedures in the Supermarket Code,” said an OFT statement.
Nigel Jenney, FPC chief executive, told freshinfo: “I can confirm that we have spoken with the OFT about this issue, which was raised and discussed in response to a direct enquiry from the OFT.”
The OFT has written to both the FPC and the NFU. It said that Sainsbury's is also drawing suppliers' attention to the code’s mediation procedures. “The OFT would encourage suppliers who believe that a dispute has not been effectively resolved to use the mediation process,” said the statement.
The OFT has taken no view as to whether Sainsbury's changes in terms would breach the Code.
Last year the OFT commissioned an independent audit of supermarkets' compliance with the Code. This will be published with an OFT statement in the next few weeks.
