The Times: 02/11/2018
Ocado and B&M join grocery code
The supermarket industry watchdog is to start monitoring how Ocado and B&M Homestores treat suppliers after their respective annual turnovers passed the £1 billion mark.
The Competition and Markets Authority (CMA) said that Ocado, the online grocer, and B&M, the cut-price retailer, would be bound by the Groceries Supply Code of Practice, which governs how suppliers are treated to avoid abuses of power.
For example, retailers bound by the code cannot make changes to the terms of supply retrospectively and must provide notice and give reasons when cancelling a supplier’s contract.
Compliance with the code is managed by the independent Groceries Code Adjudicator, led by Christine Tacon. Her office was set up in 2013 with powers to oversee the behaviour of ten supermarket groups, arbitrate on disputes and fine errant grocers. Its biggest investigation was into Tesco, the country’s largest grocer, which it found guilty of “serious breaches” of industry rules in 2016 as it sought to flatter its financial performance
Peter Hill, the CMA’s head of remedies enforcement, said: “These rules mean that suppliers are protected from unfair business practices, and retailers can trade with confidence on a level playing field. Businesses supplying Ocado and B&M will now also benefit from this protection.”
The decision to bring them within the code will bolster J Sainsbury’s argument that it needs to complete its merger with Asda, which will come under scrutiny by the CMA, to stay ahead of the competition.
B&M declined to comment. Its shares closed up 7 ¼ p at 424p. Ocado did not respond to requests for comment. It closed down 8½p at 846¾p.
