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Morrisons are not invisible to the Groceries Code Adjudicator

2016-07-09 - David Sables is CEO of Sentinel Management Consultants - sales negotiation advisors to leading fmcg suppliers
Source - The Grocer

So something good DID come of the Tesco investigation. In my speech at last year’s GCA conference, I referenced unbalanced demands issued by Morrisons to its suppliers. Little did I know, around the same time (in June and July 2015) the GCA received evidence that Morrisons had requested lump sums to be paid - with implied threats of delistings. No negotiation was offered, there were no references made to supply agreement variations or due notice. How very five years ago.

Morrisons avoided a full investigation and potentially a fine of up to £100m, because of its swift action to rectify the matter, with CEO David Potts reassuring the Adjudicator he has the situation back under control again, referencing “a new management team who have modernised and simplified all our buying practices”.

Thing is, I once heard a presentation from new group commercial director Darren Blackhurst and he had more war rhetoric than Winston Churchill. Guns, bombs and zig-zagging through minefields were the basis of most of his analogies to trading. And now I keep hearing about the ‘trading ninjas’ he wants in Morrisons. What exactly does he mean?

In the 15th century, the ninja was a mercenary in feudal Japan. Abilities in ninja training apparently included invisibility, walking on water and control over the natural elements. Now I’ve yet to meet a buyer who can walk on water (though plenty think they do), but constructing credible arguments to continue requests for lump sum payments while meeting the letter of the Code sounds a lot like invisibility to me.

Many suppliers coughed up, not knowing how to reference the Code. Worse still, some didn’t even take the money when Morrisons was forced to offer it back.

Meanwhile, with the GCA warning of suppliers “signing away their rights” by agreeing to newly worded contracts drawn up by the supermarkets that enable them still to ask for lump sums, what of the Morrisons trading ninjas? Just know, the role of the ninja included espionage, sabotage, assassination and guerrilla warfare. Their covert, irregular methods were deemed ‘beneath’ the samurai, who observed strict rules about honour and combat.

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