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Asda accused of bullying suppliers

Asda sign

A new report from The Groceries Code Adjudicator (GCA) has accused Asda of using “aggressive tactics” to demand suppliers pay significant sums of money or face being de-listed by the retailer.

The industry watchdog investigation led by adjudicator Christine Tacon focused on “Project Renewal”, implemented by Asda in Q1 2016 and included demands for price reductions from many suppliers. Most companies were given as little as 24 hours to agree to Asda's demands, while one supplier given overnight to agree or risk being de-listed the following day. The GCA report stated that suppliers were being asked for as much as 25% of the annual turnover of the product.

Taco said “If they were not successful in negotiating terms on which to remain listed, some reported being given non-negotiable periods of notice of de-listing, with periods of between four and eight weeks being reported to the GCA".

The investigation also criticised Asda’s use of a third party company to identify potential cost savings. “Providing incentives to third parties to generate income or cost savings for the retailer may encourage behaviour inconsistent with the Groceries Supply Code of Practice and the retailer’s values,” Tacon said.

The GCA stated that Project Renewal had not been conducted in a ‘wholly code-compliant way’. Asda code compliance officer Sarah Dickson said the grocer took its responsibilities seriously. She said buyers were given new training and it had stressed a commitment to full compliance with the Groceries Supply Code of Practice.

“We have also reduced our payment terms for small suppliers to 14 days and our larger suppliers are testing good faith receiving,” she added.

Dickson urged suppliers to raise any concerns they had directly with her.

Source: Insight DIY Team

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06 September 2017

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