The Groceries Code Adjudicator (GCA) published the results of a major investigation into the high-street supermarket Tesco, on 26 January 2016.
The GCA found that Tesco had breached the Groceries Supply Code of Practice by delaying payments to suppliers and requiring payments for better positioning of products. These are both considered to be unfair trading practices.
Farming and food waste organisations - including Sustain - joined forces with the Conservative MP Julian Sturdy MP, to write an open letter (published in The Telegraph newspaper), calling for the GCA's protection to extend to farmers. Currently, the GCA's protection covers only 'first tier' suppliers, which does not include the majority of farmers whose produce is sold on supermarket shelves, often as an ingredient in other products.
The open letter reads as follows:
The Groceries Code Adjudicator uncovered Tesco’s failure to pay its suppliers properly, exposing how the supermarket has been able to abuse its market position. In the light of these findings, we welcome Tesco’s contrition and public commitment to change further the way it works with its supply base.
This case demonstrates the value of the adjudicator, which now also has the ability to fine supermarkets that step out of line. This will incentivise better purchasing practices, with the benefits being felt by producers that sell directly to big retailers. The next step is to extend the GCA’s remit to cover the whole supply chain and protect indirect suppliers, including many farmers in Britain and abroad.
Julian Sturdy MP (Conservative)
Chief Executive, Traidcraft
Managing Director, Feedback Global
Head of Policy, National Farmers' Union
Director of Policy and Public Affairs, Fairtrade Foundation