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Why not just outlaw the obviously unfair trading practices?

2014-07-14 - David Sables - CEO
Source - The Grocer

I’m often accused of emotive language when discussing the Groceries Code Adjudicator. Well yes! Look, it’s not disputed that there are unfair practices afoot. Frankly, it’s a bit odd that more people are not emotional about it. Suppliers are very emotional and are beginning to report issues to me rather than risk anonymity lapses.

Meanwhile, retailers circumvent the spirit of the code by word games. Say ‘request’ in place of ‘require’ and it’s all good! You have a choice then. Right? Sure, a choice of how you say ‘yes’! The punishment you get for saying ‘no’ is within the buyer’s remit. It’s their job to delist and sideline.

I am a big fan of suppliers waking up and learning how to deal with retailers rather than complaining about mistreatment. Bigger companies tend to but even their margins have transferred to the retailers over the years, at the cost of innovation – bad for consumers.

The GCA is making progress, but governing bodies appear to understate the culture of fear. Apparently there’s no real issue because they heard from a joint platform where suppliers and retailers said collaboration was excellent. Pockets of periodic collaboration are there, but generally in joint forums retailers say it's fine - because they are the bullies - and then suppliers say ‘we agree with them’. I sympathise with the task of tackling the inherent problems here. But other countries are looking to us as an example of best practice. Progress though it is, I feel our success is a little overstated in these forums.

The law is there to protect consumers and competition. Quite rightly the differences across markets and categories mean that an EC ‘one size fits all’ law would fail and ultimately be anti-consumer. But this fact creates inertia: an inactivity coupled with a pretence that it’s all OK.

Why wait for complaints when we know what the issues are? Action that would shoot down specific practices would be too hard, it is felt. I disagree. We love small progress – just look at the GCA. So here, I’ll give you one: stop queried supplier invoices being deducted from payments. Suppliers don’t need forensic auditors to prove when they’ve been ripped off. It’s just wrong and its wrong in all markets. It’s a major problem and easy to legislate on, so let’s get started. Emotive or what?

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