Grocery Supply Code of Practice (GSCOP) - One year on

by Jack Ward

GSCOP – 1 year on

On Monday 23 June 2014 the Grocery Code Adjudicator held her first annual conference to report on the activities of the GCA and the implementation of the Groceries Supply Code of Practice (GSCOP).

GSCOP deals with a specific list of areas relating to the supply chain. These include the principle of fair dealing; variation of supply agreements and terms of supply; supply chain procedures; payment delays; contributions to marketing costs; shrinkage payments; payments for wastage; payments as a condition of a supplier; compensation for forecasting errors; contributions towards promotions and delisting.

After 12 months of operation the Adjudicator, Christine Tacon, highlighted five areas of Code compliance where she receives most information and evidence. These five priority areas are:

Forensics: third party audits
Drop and drive: delivery performance
Forecasting/service levels
Request for lump sum payments
Packaging and design charges.

Contact between the GCA and the large retailers indicates that they are being proactive in addressing these issues and progress is being made although some of the issues, e.g. improving forecasting, are very complex and will take time to resolve.
The CGA has also set out its goals for the coming year and these will be:

Working with the large retailers to improve the culture of Code compliance from the Board downwards.
Improving awareness of the reach of the Code and building supplier confidence to raise Code-related issues with the GCA and Code Compliance Officers.
Making progress on each of the five priority areas.
Increasing the number of responses to the annual market survey to get an even more accurate measure of Code compliance.
Being fully prepared to launch an investigation when merited.

Commenting on these goals, Christine Tacon said “I believe the new regulatory role can do much to help strengthen the supply chain and bring further innovation to the groceries sector, together with benefits to suppliers, retailers and customers. In the year to come I am determined to maintain the pace of progress that we have achieved in our first nine months”.
One area where significant progress has been made is on the issue of forensic auditing. This is a process where retailers use specialist teams to scrutinise supplier accounts for errors which could result in retrospective payments back to the retailer. Eight of the ten retailers covered by the code had signed up to a voluntary two year limit rather than the six years which had become standard practice.
A full copy of the Adjudicators annual report and the findings of the YouGov survey can be found here