Below is a list of archive news items. For recent updates, see Latest news.
1st January 2012
Harper Adams University
I have accepted an invitation to be a Governor at Harper Adams.
2nd January 2012
I am now an Independent Non Executive Director of Farmway Ltd and have had my first board meeting.
1st February 2012
Living with Environmental Change was set up to coordinate the work of the Research Councils. It is customary to have reviews of effectiveness and I have been invited onto the panel to look into this. It will be an interesting exercise as I have only just joined the Business Advisory Board arm of LWEC and finding out the extent to which it is living up to its remit is a good place to start.
1st May 2012
UK Farming PLC
I’ve accepted the chairmanship of the above which is being set up by Brooks Macdonald Asset Management as a means for private individuals to invest in land ownership and farming.
I am a judge of the Farmers Weekly “Farmers Apprentice” competition involving a one week boot camp of apprentices undertaking relevant farming tasks sponsored by McDonald’s.
> Farmers Apprentice website
2nd September 2012
Anglia Farmers – Non Executive Director
I have been co-opted as a Non Executive Director of Anglia Farmers, the £250m turnover buying group commencing Sept 2012.
> Anglia Farmers Limited
22nd October 2012 - 26th October 2012
Farmers Weekly Farmers Apprentice judging
Bootcamp at Reaseheath College to judge the 10 finalists to be the Farmers Weekly farm apprentice. Winner gets £10k.
All confidential as it was all filmed and will be released end November on-line, building up to who has won, which will be announced on Dec 5th. The winner doesn’t know either!
1st November 2012
Network Rail – Public member
I have been accepted as a Public Member of Network Rail: there are about 40 Public Members who act as shareholders, serving a 3 year term commencing Nov 2012.
Consumer and Competition Minister Jo Swinson today announced that Christine Tacon has been appointed to the newly created role as the independent Groceries Code Adjudicator.
In her new role, Christine will be responsible for enforcing the Groceries Supply Code of Practice, which regulates interactions between the ten largest supermarkets with an annual turnover of >£1bn and their direct suppliers.
BIS Select Committee approves my appointment to GCA
The Business Industry and Skills (BIS) Select Committee, who have scrutinised the Grocery Code Adjudicator Bill, asked for a pre-appointment hearing to meet the Government’s proposed candidate for the post of Groceries Code Adjudicator. This was a specially convened meeting in the House of Commons, which lasted an hour with questions on my experience and how I was going to approach the role. The full script will be made available, I currently have the draft to correct for typos. It was filmed and mentioned on Today in Parliament
17th April 2013
Included in the 2013 Cranfield ‘100 Women to Watch’ list
I’ve been included in the 2013 ‘100 Women to Watch’ report, published by Cranfield University’s International Centre for Women Business Leaders (‘CICWL’). The report complements the Centre’s ‘Female FTSE Report’, which measures the number of women executive directors on the corporate boards of the UK’s top 100 companies.
GROCERIES CODE ADJUDICATOR BILL RECEIVES ROYAL ASSENT
The Groceries Code Adjudicator Bill was given Royal Assent today, creating the UK’s first independent adjudicator to oversee the relationship between large supermarkets and their direct suppliers.
Competition Minister Jo Swinson said:
“This Government is committed to ensuring that all businesses have access to fair and open markets.
“The Groceries Code Adjudicator will make sure that large supermarkets abide by the Groceries Supply Code of Practice, and treat their suppliers fairly and lawfully. This will give suppliers the stability to help them grow, innovate and compete in the market. That is why I’m delighted the Bill achieved Royal Assent today.
“I am sure that the Adjudicator will make strides towards delivering fairer food supply chains and stronger growth in the industry.”
I have been increasingly involved in NERC and BBSRC in the past 18 months to increase awareness of the potential of engineering in agriculture and to ensure that research fits the “sustainable intensification” of agriculture agenda for future food security. I am delighted that they think I can add value to the Council.
30th June 2013
Non Executive Director of Met Office
There was a hold up approving one of the other new NEDs, so this has been a while getting out. I have been to a board meeting and had an induction, a wonderful outfit to be part of and loads of potential.
Text of the press release:
I am pleased to announce the appointment of Wendy Barnes, Christine Tacon, David Burridge and Sir John Beddington as Non-Executive Directors. They will join Paul Rew (Non-Executive Director), David Curley (Shareholder Executive Advisor) and the senior Met Office Executives in comprising the Met Office Board.
The new Non-Executive Directors bring a wide range of knowledge and expertise that will help the Met Office meet its corporate plan objectives. They will help support us in the provision of weather and climate services that help Government, the public and commercial customers achieve their goals through enabling protection, increasing prosperity and improving well-being. I am very much looking forward to working with the new Board, utilising the members’ diverse range of skills and experience to best meet the challenges posed by climate, weather and the international economic situation in the coming years.
Chief Executive John Hirst has commented: “It’s really good that we have been able to attract such high calibre people. I am confident that the new Board composition will provide strong support and constructive challenge to the Executive.”
It is with great thanks that I mark the retirement of Sir Brian Hoskins and Mike Goodfellow for the support, guidance and intelligent advice they have contributed to the Met Office Board over the years and wish them both all the best for the future.
The conference is sponsored by Brodies solicitors and will be promoted by ScottishLand & Estates, National Farmers Union, FoodDrinkEurope and the Scotch Whisky Association.
26th November 2013
Toughen up: what Australia’s supermarket code could learn from the UK
This is an interesting opinion piece by Professor Caron Beaton-Wells drawing attention to the weaknesses of the Australian code as compared to the UK model.
17th January 2014
BBC Any Questions
Joining panel with Jonathan Dimbleby, Andrew Mitchell MP, Andy Burnham, Tony Caldeira in Southport
3rd May 2014
GCA Bristol Food Festival BBC Costing the Earth debate
I have been asked to participate in the debate which will be recorded on 3rd for playing out on May 5th
22nd May 2014
GCA Hay Festival Food Security and Labelling Debate 22th May
I have been asked numerous times to speak at this Festival but always too late to get in my diary. Last year we put the date in straight away.
Speaking alongside Prof Tim Benton Champion for Global Food Security.
I have never been to the Festival so am looking forward to this but it will cost people £4 to hear us on the Good Energy Stage at 1700
24th May 2014 - 26th May 2014
Groceries Code Survey still open
The YouGov survey is staying open for entries over the bank holiday weekend. So if you haven’t entered you still can.www.yougov.com/gca
If you want to know more first, visit the website www.gov.uk/gca and you can link from there too.
19th June 2014
Anglia Farmers AGM
Following the board meeting at 1200
23rd June 2014 - 24th June 2014
Groceries Code Adjudicator Conference 23rd (and 24th) June 2014
June 23rd: One day conference QEII Conference Centre Westminster.
Following a statement in the House of Commons on 25th June by the Secretary of State, the role of Public Members ceases to exist from July 1st. Given the AGM was scheduled for the 15th July, this came as a surprise on timing, but it was clear that there was too much Governance once the debt was classified as government debt and the Dept of Transport became involved in Network Rail oversight and Governance.
The 46 Public Members will have a final meeting on 14th July to be thanked for our contribution.
My term of office was due to cease in November 2015 and I had not applied to serve a second term.
20th July 2015
GCA Annual report published
7th August 2015
GCA Newsletter published
18th November 2015
GCA 5th newsletter published
26th January 2016
GCA Investigation into Tesco plc published
The full report can be found at www.gov.uk/gca (from 1000)
4th March 2016
Food and Drink Wales suppliers symposium, Aberystwyth
A symposium organised in conjunction with the Welsh government to update suppliers on the work of the GCA.
I will make time to have private discussions with suppliers who want to raise issues with me.
14th April 2016
GCA Investigation Report into Tesco plc, Edinburgh
An event organised with the support of SF&D and SFDF for suppliers to hear about the GCA role, the recent investigation and with surgery sessions for suppliers afterwards who want a private talk with the adjudicator
25th April 2016
GCA Investigation Report into Tesco plc, Belfast
An event organised with the support of NIFDA for suppliers to hear about the GCA role, the recent investigation and with surgery sessions for suppliers afterwards who want a private talk with the adjudicator
1st May 2016
Met Office Non Executive Director role ends
After 3 exciting years being on the Met Office board, I will leave at the end of May. 4 of us were appointed at the same time and best practice is that boards rotate (ideally not all at once…) and other people are given a chance. The decision was understandably made to keep the 2 scientists on the board so I am leaving but wishing them all the best. It is a fantastic organisation, world leading and now is midway through a £97m project to install a super-computer. Well set for the future.
3rd May 2016
Appointed Chair MDS Ltd
The MDS Ltd board of Directors has appointed Christine Tacon CBE as Chair, effective from May 3 2016.
Christine has extensive produce industry experience. She managed the Co-operative Group’s farming business for 11 years and was awarded a CBE for services to Agriculture in 2004. Prior to this, Christine worked within Mars Confectionery, Fonterra and Vodafone, and has demonstrated her commitment to the next generation through Ladies in Agriculture. In 2015 she was appointed as the first Groceries Code Adjudicator
Christine brings to MDS her ability to combine strategic leadership with practical understanding of both private and public sectors. This is backed by a strong commercial background in fast-moving consumer goods, farming and the environment and extensive communications experience in high-profile roles.
Julius Joel, Director and former MDS trainee said: “It is great that Christine has agreed to help us take MDS to its next level. Her experience and energy will help the business strengthen its service to its member companies, re-invigorate its training platform and build on the unique management development program we offer.”
About Management Development Serviced Ltd (MDS)
Since its inception in 1986 MDS has established itself as a leading training provider for talented graduates in the fresh food and produce industry. MDS has expanded steadily as companies seek to safeguard the future by attracting the right calibre of talent into the produce industry.
Today, MDS has 30 member companies with activities that encompass the whole supply chain of vegetables, salads, fruit, flowers, plants, arable and prepared food products in the UK and internationally. A strong list of new membership applications now highlight the interest in what is now seen as a ‘model’ for specialist management training. MDS is an independent non-profit making organisation whose aim is to recruit and train the very best people to secure the future of this fast-changing industry. The strength of MDS comes from members working in partnership with a common goal, even though some may be competitors in the commercial world. MDS is run by a Board of Directors appointed from within the membership, with day-to-day management support from a team based in Peterborough.
6th May 2016
Honorary Professorship from Harper Adams University
I have been awarded an Honorary Professorship which entails giving a couple of lectures a year at the University: I am humbled by the honour and pleased to maintain an ongoing link with the University.
Until the end of April I was a Governor but felt I no longer had time to do this role justice: there is also a potential conflict in that Harper Adams accredits the MDS Post Graduate Certificate.
I will continue to support Harper Adams University which this year was voted Number One in the WhatUni Awards!
19th June 2017
MDS Meet the Trainees and IGD MasterClass
A twice yearly opportunity for MDS members to meet the trainees.
Trainees present for one minute what they are looking for in their next secondment. There is a book of all their summary CVs.
Members give a short overview of the secondments they are offering.
IGD will run a Masterclass afterwards.
Old Barn Peterborough
26th June 2017
Annual GCA Conference 26/06
During the conference I will be reporting on the previous year’s GCA activities, YouGov will present the results of my annual survey and there will be a workshop for suppliers to share information with me.
The conference will be held at Church House Conference Centre, Dean’s Yard, Westminster SW1P 3NZ.
This conference is free of charge, to register please visit the GCA website.
26th June 2017
Press Coverage: Department for Business, Energy & Industrial Strategy.
Christine Tacon reappointed as Groceries Code Adjudicator
The Groceries Code ensures a level playing field between supermarkets and their direct suppliers.
Consumer Minister Margot James has today (26 June 2017) announced the reappointment of Christine Tacon CBE as the Groceries Code Adjudicator (GCA).
Covering the UK’s 10 largest supermarkets, the Groceries Code was introduced in 2010 to ensure a level playing field between supermarkets and their direct suppliers. The Groceries Code Adjudicator was set up to enforce compliance with the Code in 2013. The news comes ahead of the Groceries Code annual conference on Monday 26 June.
Having held the role of Groceries Code Adjudicator since its launch, Ms Tacon has overseen significant progress in compliance with the Groceries Code.
A recent survey showed an 8% fall in suppliers reporting breaches of the Code in the last 12 months in 2015 and a 17% decrease compared to 2014, with both large retailers and small suppliers reporting improvements in awareness of the Code.
Minister for Small Business, Consumers and Corporate Responsibility, Margot James, said:
“This reappointment recognises the significant and valuable contribution of Christine Tacon in ensuring suppliers get a good deal when doing business with supermarkets. Under Christine’s guidance, the Groceries Code Adjudicator is now recognised internationally as a model example of modern enforcement. It is vital the government retains this expertise, which is why I am delighted to reappoint Christine and thank her for her work so far.”
In 2015 Ms Tacon investigated alleged Code breaches by Tesco, which resulted in the supermarket adopting fairer payment practices and improved transparency in all its dealings with suppliers.
As a statutory requirement, the government reviewed the GCA’s performance in October 2016, and a full report will be made public later this summer.
Supermarket treatment of suppliers – the good, bad and ugly.
Asda and Iceland have come bottom of a league table ranking UK supermarkets on fair trading practices with suppliers, while Aldi and Sainsburys have come top.
The results come from a YouGov survey of suppliers, conducted on behalf of supermarket watchdog the Groceries Code Adjudicator (GCA).
Delays in payments and no compensation for forecasting errors were again the top issues suppliers said they faced.
Eighteen percent of suppliers said Iceland “rarely” complied with the Groceries Code – legislation intended to ensure the UK’s biggest retailers treat suppliers fairly – while the figures was 11% for Asda, with 1% saying it “never” complied.
Only 5% of suppliers said Aldi and Sainsbury’s rarely or never complied, meaning Aldi topped the charts for the fourth year running, while Sainsbury’s was the best of the “big four” retailers for the fourth year.
Issues at Iceland and Asda
Christine Tacon, the current GCA, said Iceland had scored well with suppliers on individual issues and no suppliers said they had raised issues.
A closer look found the retailer was not necessarily breaching the code, but was coming very close and leaving suppliers “in a constant state of jeopardy” where they always felt threatened, said Ms Tacon.
She said Iceland had “really taken this on board” and changed some practices, such as removing charges to suppliers for consumer complaints, in an effort to move up the table.
At Asda, however, 19% of suppliers said its trading practices had got worse over the past 12 months – the highest figure for any retailer in the survey.
Of those direct suppliers who raised issues about retailer practices over the past year, nearly a third said they had done so about Asda.
In a table ranking the supermarkets on each code-related issue, such as late payments or unfair charges, one retailer was given the worst score on 11 out of 14 issues – far higher than any other retailer.
Cultural change at Tesco and Morrisons
Ms Tacon said a cultural change was happening at Morrisons and it had moved up the rankings as a result – 44% of suppliers surveyed said it had improved its practices in the past year.
Tesco, which has also undergone a big cultural change since the GCA’s investigation into bad practices last year, saw 54% of suppliers say it had improved.
The number of suppliers who said they had raised an issue about Tesco also dropped from 32% in 2016 to 18%.
The YouGov survey was conducted in March and April and asked suppliers about their treatment over the past 12 months.
A total of 1,220 direct suppliers took part (up from 900 last year), 198 indirect suppliers and 35 trade associations.
Groceries Code Adjudicator agrees to a further year in the post, while new survey suggests her work is having a major impact.
Groceries Code Adjudicator Christine Tacon has confirmed that she will continue for a further year, while the new government evaluates the role’s remit.
At the GCA’s annual conference in Westminster on 26 June, Tacon said her decision “allows both me and BEIS ministers to consider whether I am the right person for the role if the call for evidence leads to significant change to the GCA.”
The event also saw the release of Tacon’s office’s latest survey, which shows fewer direct suppliers saying they had experienced code breaches for the fourth year running. The proportion now stands at 56 per cent, down from 62 per cent in 2016 and a high of 79 per cent in 2014.
“The overall fall is welcome, but the more dramatic data comes from looking at supplier experience of issues that I have identified among my Top 5 and where I have used collaborative or more formal regulatory action to drive change,” Tacon said. She named her new Top 5 issues as delayed payments, forecasting, promotions, payments for better positioning and ‘pay to stay’.
Among the standout figures in the report, only 12 per cent of suppliers reported forensic auditing as an issue in 2017, down from 45 per cent in 2014 – this followed a voluntary commitment among eight out of 10 supermarkets to restrict the practice.
Only 10 per cent of suppliers raised concerns about lump sum payments for margin maintenance, down from 36 per cent in 2014. That followed Tacon’s investigation into Tesco, which made clear that any request for margin needed to be unambiguously supported by supply agreements.
In 2014 unjustified charges for consumer complaints was the second-biggest issue, with 37 per cent of suppliers reporting it. A year later Tacon’s office published a best practice statement and monitored progress, leading to only 12 per cent of suppliers reporting it as an issue in 2017.
And following action from the adjudicator, only 11 per cent have reported concerns with packaging charges this year, compared to 24 per cent in 2014 and 30 per cent in 2015.
Tacon said: “Suppliers have found the issue of packaging and design charges to be an irritant for years. Recently a supplier in the fresh produce industry told me that that they had been trying to resolve the problem of overcharging in this area for more than 10 years. But within 18 months of me focusing on the problem he was pleased to say the issue had gone away.
“I see this as a sign that the collaborative approach that I have promoted has been a real engine of change and is achieving positive results across all retailers. I am delighted that suppliers are seeing the benefits of this change.”
For the fourth year running, Aldi topped the overall table in which suppliers rank their perception of retailers’ compliance with the code. Sainsbury’s was the highest placed of the big four, also for the fourth year in a row.
“I am also pleased to report that suppliers are recognising that Tesco is continuing to improve; as is Morrisons, following a step change in its engagement with suppliers,” Tacon added.
Tony Baines, managing director of buying at Aldi, welcomed the report. “We are incredibly proud to have topped the Groceries Code Adjudicator’s annual survey for the fourth consecutive year,” he said. “We recognise that pressure on supply chains is increasing across the retail sector, but our approach will not change. We will continue to build long-term relationships with suppliers that are fair, sustainable and predictable.”
Unfair packaging charges reduced says adjudicator, but payment delays still troubling.
Groceries Code Adjudicator (GCA) Christine Tacon says the latest polling data from supermarket suppliers “demonstrate major progress across key issues” during her four years in the role. But she says payment delays remain a major issue.
The latest YouGov survey, carried out each year to coincide with the GCA’s annual conference, shows for the fourth year running that fewer of direct suppliers (down from 62% last year to 56%) said they had experienced one or more breaches of the Groceries Supply Code of Practice (GSCoP), which the GCA polices.
Tacon said: “The overall fall is welcome, but the more dramatic data comes from looking at supplier experience of issues that I have identified among my Top Five, and where I have used collaborative or more formal regulatory action to drive change.”
The figures show a fall in suppliers experiencing:
“forensic auditing” – from 45% in 2014, to 12% in 2017;
“margin maintenance” requests, from 36% in 2014 to 10%;
unjustified charges for consumer complaints, down from 37% to 12%;
unfair packaging and design charges, down from 24% to 11%;
Tacon added: “Suppliers have found the issue of packaging and design charges to be an irritant for years. Recently a supplier in the fresh produce industry told me that that they had been trying to resolve the problem of overcharging in this area for more than 10 years. But within 18 months of me focusing on the problem he was pleased to say the issue had gone away.”
The 2017 survey also saw a increase of more than threefold in the number of suppliers participating, rising to 1,220. It also revealed:
For the fourth year running, Aldi topped the overall table in suppliers’ perception of retailers’ compliance with the code, while Tesco “is continuing to improve”, Tacon noted;
Delay in payments continues to be the issue of highest concern to suppliers, with with 32% of suppliers reporting incorrect deductions from invoices, with or without notice.
Tacon noted on this last point: “There is still work to be done in this area and I am right to maintain this as one of my Top Five issues.”
At the conference in London, Tacon confirmed she has committed to another year as GCA. Her remit is still being considered by the Government.
Asda is named worst supermarket in treatment of suppliers.
Asda has been named as the worst of the UK’s major supermarkets in its treatment of suppliers. It dropped below Morrisons, which was bottom of the list last year, as the Bradford-based chain took action to improve its performance according to a survey of more than 1,200 grocery suppliers by the industry watchdog.
About 12% of Asda’s suppliers said the Walmart-owned chain rarely or never complied with the Grocery Supply Code of Practice, which covers dealings by 10 retailers that sell over £1bn of groceries a year.
A spokesperson for Asda said: “We’ve listened to the GCA and worked to improve our ways of working with suppliers to ensure we’re doing our job in the best way we can. This includes ensuring our smaller suppliers are paid within 14 days, simplifying our processes, and eliminating some of our supplier charges and audits. We will also be introducing further changes, including the expansion of a dedicated helpdesk to ensure our suppliers have a single point of contact to raise any concerns.”
Christine Tacon, the grocery code adjudicator who enforces the rules and has the power to fine retailers, said that she was generally pleased with progress since she came into office four years ago. She said more suppliers were getting involved as they found that she was able to bring about real change in the grocery market.
Overall, the proportion of suppliers who said they had a problem with breaches of the code fell to 56% from 62% last year. Incorrect deductions from invoices remain the top problem, affecting 32% of suppliers, followed by data input errors not being resolved promptly then unfair charges for packaging artwork.
While Asda was worst of the major supermarket chains, Iceland was the worst
retailer overall at complying with the code, according to the survey. However, Tacon said the chain had made improvements on many fronts.
She said she had not received any specific complaints about Iceland breaching the code, but suppliers felt “in a constant state of jeopardy” in their dealings with the discounter. They feared that their products would be removed from its shelves if they took a wrong step.
Iceland said it had the best score of all the retailers in terms of specific issues raised by suppliers despite its low ranking on overall compliance. A spokesman said: “We have worked hard to improve our compliance to achieve this, and feel sure that this will be acknowledged by our suppliers.”
The survey found that Aldi offered the best compliance with the code of practice for the fourth year in a row, followed by Sainsbury’s.
Consumer Minister Margot James has announced the reappointment of Christine Tacon CBE as the Groceries Code Adjudicator (GCA). Having held the role since its launch, Tacon has overseen significant progress in compliance with the Groceries Code. In 2015 she investigated alleged Code breaches by Tesco, which resulted in the supermarket adopting fairer payment practices and improved transparency in all its dealings with suppliers.
The Groceries Code Adjudicator’s annual conference in Westminster carried additional significance this year as it marked the end of Christine Tacon’s first term and raised questions about the organisation’s long-term direction and future remit.
The organisation has undoubtedly had a positive impact on the grocery sector. Among the standout headlines in the latest GSCOP survey was that the number of suppliers experiencing potential breaches of the code has fallen by almost a third since 2014. The proportion now stands at 56%, down from 62% last year and a high of 79% in 2014.
There has also been a significant reduction in supplier complaints on thorny issues such as forensic auditing, unjustified charges and lump sum payments. But although the survey numbers are impressive, they don’t fully reflect the positive impact the GCA has had on grocery in the four years since it was launched.
Arguably, its most important achievement has been to bring about a change in culture and behaviour. It has encouraged supermarkets to reassess their relationships with suppliers to ensure there is a collaborative benefit for both parties.
The GCA has been effective in highlighting poor or unfair practices across the sector, which has resulted in a number of retailers changing the way they work with suppliers. This, in turn, has increased trust and transparency levels across the wider industry.
It was particularly pleasing to see a record number of suppliers participate in this year’s survey, including more than 500 suppliers to our business.
This is a clear indication that suppliers have the confidence to raise issues with the Adjudicator, which bodes well for the long-term future of Aldi and the wider sector.
From a retailer’s perspective, healthy supplier relationships that benefit both sides make sound commercial sense. This has been our approach ever since Aldi opened its first UK store more than a quarter of a century ago.
We believe in open, honest dialogue with our suppliers to give them clarity and stability in their dealings with us. This builds long-term relationships and allows us to provide great products to customers and a fair deal for our suppliers.
In practice this ensures that our suppliers do not make any financial commitments without a prior agreement from us on cost, specifications and volumes.
It means our suppliers are not placed under financial strain in supporting unnecessary bogofs, multibuy promotions or charges for better positioning of goods or increased shelf space. This keeps our sales volumes and buying patterns with suppliers stable and predictable through the year.
Thanks to this approach, we have topped the GCA’s survey for the fourth consecutive year, an achievement we are incredibly proud of, and one we are committed to maintaining by working together with our suppliers.
We believe the spotlight that has been focused on the relationships between retailers and suppliers is positive and something that the GCA deserves a huge amount of credit for.
Asda forced to repay suppliers after breaching fair dealing code
Grocer breached ‘overarching principle of fair dealing’, says industry regulator – but report stops short of calling for inquiry
Asda has been forced to pay back hundreds of thousands of pounds to dozens of suppliers after breaching an industry code governing fair dealing.
The company, named as the worst supermarket in its treatment of suppliers earlier this year, was found to have demanded up front payments worth up to a quarter of the value of annual sales of particular products in order for suppliers to retain their place on the shelf.
Some of those who refused to make these payments, which were greater than those agreed in suppliers’ contracts, were given notice that they would be ousted within as little as four to eight weeks, according to the industry watchdog.
The demands, reported by the Guardian last year, were in breach of the grocery supply code of practice – government-backed regulations that can attract a fine of up to 1% of UK turnover.
In a “code clarification” document published this week, the Groceries Code Adjudicator (GCA), said it had not decided to launch a formal investigation into Asda’s behaviour or issue a fine.
However the regulator, which oversees a government-backed industry code of practice, said a review had found that the Walmart-owned chain had breached “the overarching principle of fair dealing” in the code with conversations “designed to carry an implication of detriment if any supplier declined to agree” to its demands.
The watchdog said there was no need to launch an investigation. Asda had “proactively engaged with suppliers to rectify any lump sum arrangements, which should not have been made” and put further safeguards in place to prevent any further breaches.
The GCA report added that the project renewal strategy had been designed by a consultancy commissioned by Asda to achieve cost savings, and it was clear that “the role of the third party consultants was closely bound up with the issues raised”, as they had been able to achieve bonuses based on the amount of money they were able to save Asda.
The supermarket said project renewal, launched in late 2015 under former chief executive Andy Clarke, had been Asda-led with support from Bain.
Asda’s current chief executive, Sean Clarke, said: “Our mission is to save customers money through low prices by always securing the lowest possible costs built on a foundation of strong, trusted partnerships with our suppliers and absolutely in line with the groceries supply code of practice (Gscop).
“The matter raised in the GCA’s case study occurred over a year ago and since then we have significantly strengthened our Gscop compliance programme. We have engaged openly and transparently with the GCA to support her enquiries in keeping with her collaborative approach.”
Bain said in a statement: “As per our company policy, we do not speak publicly about who may or may not be our client.”
Asda needs to follow Tesco’s example to keep in the GCA’s good books
Yesterday’s revelation that Asda had demanded millions from suppliers to finance its Project Renewal strategy – or face having their products stripped from its shelves – made for yet more X-rated viewing for the struggling Walmart giant.
In fact, the initial reaction upon reading Groceries Code Adjudicator Christine Tacon’s scathing report into a probe secretly dating back to March 2016, is just how lucky the retailer has been to avoid a full-blown investigation.
It was in February last year, before the Adjudicator began her trawl through the events leading up to yesterday’s condemning code clarification, that The Grocer first revealed suppliers were being asked for eye-watering payments. We reported how suppliers were asked to slash prices by up to 10% and invest huge sums in promotions funds. Meanwhile, Asda boss Andy Clarke, aided by external consultants Bain & Company, set about his summer SKU cull.
Yesterday’s report by Tacon shines light on the pressure that was put on suppliers, who in some cases were given 24 hours or even less to agree to such demands. And it has alarming parallels to the sort of behaviour that Tesco infamously found itself accused of in the Adjudicator’s first investigation two years ago.
So why has Asda escaped, and is the Adjudicator’s decision to hold back from the ultimate deterrent justified?
Tacon seems in little doubt that Project Renewal was in breach of paragraph three of the code, dealing with variation of supply agreements. And the evidence of “aggressive tactics” and threats levelled at suppliers will leave a very bad taste indeed, especially for smaller suppliers less equipped to stand up to such battlefield tactics.
Yet what is also clear is that under new broom Sean Clarke practices are changing for the better at Asda.
Tacon revealed how through internal inquiries, involving going through millions of emails, Asda had sought to root out such behaviour.
As well as repaying lump sums to an unspecified number of suppliers, Asda has given new training to all its buyers on the principles of the code. Rather than using it to screw suppliers, Asda is overhauling its previous dubious behaviour on Drop and Drive and has set up a new supplier helpline.
A recent survey by the British Brands Group showed Asda had made a step-change towards greater transparency on its code compliance, even if its behaviour still needs to improve.
Most fundamentally, the new Clarke at the helm has recognised that Asda cannot abuse its supplier relationships as the basis for a financial recovery. Again, there is a huge parallel here with the root and branch overhaul carried out by Dave Lewis at Tesco.
Asda now has to prove it can change its perception among suppliers in the same way Tesco did. But while there will no doubt be many suppliers disappointed at the Adjudicator’s decision to hold back from the nuclear option, the long-term benefits could be worth it if the sort of behaviour seen in Project Renewal is rooted out for good.