What's In Store?

The way in which large supermarket chains deal with their suppliers has been the subject of much angst and discussion in the EU.  This has generally focused on the buyer power enjoyed by supermarket chains which means that suppliers bear the business risk associated with e.g. imperfect fruit and vegetables (automatically rejected).

In the UK, there have been multiple investigations by the competition authorities into the supermarket/grocery sector and, in 2006, the Competition Commission expressed concerns that retailers were transferring excessive risks onto their suppliers.  The Groceries (Supply Chain Practices) Market Investigation Order was introduced to address these concerns.   It requires "Designated Retailers" (i.e. the top 10 supermarkets, each with a UK turnover exceeding £1bn) to follow certain compliance measures and to incorporate the Groceries Supply Code of Practice (GSCOP) – which came into force in 2010 - into their supply arrangements.