Valuable lessons to be learned from ASDA supply chain investigation, says UFU
Friday, 8 September, 2017
The Ulster Farmers’ Union has praised the latest investigation by the Grocery Code Adjudicator (GCA) saying that it is an ugly reminder to suppliers and farmers of what relationships with retailers could be like if left unchecked. “The GCA plays a critical role in helping to ensure there is fairness in the supply chain. Given the findings of this investigation it is clear that it is very much needed. In fact, we would argue that the GCA’s powers should be strengthened and the remit extended to include primary producers,” says UFU president Barclay Bell.
The comments were made following the publication of the GCA’s investigation into ASDA’s treatment of suppliers under its “Project Renewal”, which aimed to increase the retailer’s price advantage over competitors and strengthen its competitive position.
UFU president Barclay Bell says that the GCA’s report makes it clear that suppliers were paying the price for the retailer’s financial gains. “The Adjudicator has rightfully concluded that ASDA’s Project Renewal was not compliant with the Groceries Supply Code of Conduct. Suppliers were being asked for significant financial contributions to keep their business with ASDA and reported threats of being de-listed, as well as changes being made to agreed terms of supply with very little notice. This is totally unacceptable and cannot be tolerated. It’s because of these kinds of unscrupulous actions from retailers that we need an authority like the Groceries Code Adjudicator.”
The Union congratulated the GCA on its cooperative approach, which encouraged swift changes in the retailer’s behaviour. “As a result of the GCA’s intervention ASDA agreed to take steps not only to put things right with the suppliers affected, but also to ensure it can’t happen again. However, given the severity of the practices we were surprised that there were no fines or penalties issued,” says Mr Bell.
For too many years farmers witnessed retailers abuse the power they had in the market. “The Groceries Supply Code of Practice was brought in to prevent this and create a level playing field. These findings are a major setback to the industry’s relationship with ASDA and the integrity of the retailer has been damaged significantly. This is a very disappointing situation. While the majority of farmers in NI will not be directly impacted by the result of the ASDA investigation on the whole it is an important win. Individually and collectively, farmers seek to be valued and treated fairly in the supply chain; this result is a step towards redressing the power imbalance,” says Mr Bell.
The UFU has also recently welcomed the opening of the European Commission's food supply chain consultation, aimed at tackling the issues that leave farmers the weakest players along the chain from field to fork.