'Paramount importance' Co-op is held to account after Code breaches, NFU says

Unreasonable notices can significantly impact farmers' businesses, NFU President Minette Batters says
Unreasonable notices can significantly impact farmers' businesses, NFU President Minette Batters says

The NFU has said it is of 'paramount importance' in holding the Co-op to account following the retailer's Grocery Suppliers Code of Practice breaches.

The Co-op 'failed to provide reasonable notice to suppliers of decisions to de-list products and varied supply agreements unilaterally and without reasonable notice in the way it applied two specific charges', according to the Groceries Code Adjudicator’s (GCA).

Christine Tacon, the current GCA, launched the investigation on 8 March 2018 after an 18-month period of significant engagement with the retailer.

The NFU has welcomed the new recommendations in order improve the Co-op's governance and processes.

NFU President Minette Batters said that unreasonable notice can 'significantly impact' farmers' ability to run profitable businesses.

“Subsequently, the five clear recommendations are of paramount importance, as they not only hold the Co-op to account, but sends a clear message to the rest of the grocery market in remaining Code compliant,” Mrs Batters said.



“This is of particular importance as we continue to do business in an uncertain environment.”

She added: “All retailers must recognise the significance they play to our members supplying them.”

Meanwhile, the Co-op has sent an apology to its suppliers following the publication of the report.

The supermarket said it has taken 'decisive steps' to ensure it treats suppliers fairly, including providing refunds to those wrongly impacted by the introduction of charges and retraining over 1,000 colleagues to 'embed a culture' of Code compliance.

The GCA recommended that:

• Co-op must have adequate governance to oversee and manage its compliance with the Code

• Co-op legal, compliance and audit functions must have sufficient co-ordinated oversight of Co-op systems to ensure Code compliance

• Co-op IT systems must support Code compliance



• Co-op must adequately train on the Code all employees who make decisions which affect a suppliers commercial arrangements with Co-op

• Co-op must in any potential delisting situation communicate with affected suppliers to enable Co-op to decide what is a significant reduction in volume and reasonable notice

The Grocery Suppliers Code of Practice provides detail on how retailers should manage their relationship with suppliers.