20% of a survey of 1,000 suppliers said that Morrisons rarely or never complied with industry rules governing supply chain relations. Recently Morrisons were forced to pay back £2 million they had demanded in cash from suppliers.
David Morrison, the Chief Executive of Morrisons was formerly with Tesco so has obviously carried over some of the bad tactics they previously used.
Now Tesco is considered the most improved main grocer in terms of supplier relations only 6 months after it was the subject of a major investigation and a scathing report.
Iceland and Asda were also thought be in breach of the legally binding code of practice.
On the positive side Aldi, Sainsbury’s and Lidl were most likely to comply consistently well with the rules.
The GCA Christine Tacon said that most of the ten supermarkets had improved their treatment of suppliers over the last 12 months although 1 in 3 suppliers still experience delays in getting paid and 1 in 4 said supermarkets had gone back on agreements.
So he wants to be able to double the GCA levy to £2 million a year and get the supermarkets that are not conforming to pay a bigger share. The GCA has the power to fine supermarkets 1% of their turnover if they don’t comply with the code.
There were 5 key issues she wanted to address in future:
- charges for artwork & design services
- delays in settling invoices
- payments demanded for margin maintenance
- payment demanded to maintain a supply
- payment for better positioning ins stores
A problem exists because suppliers are frightened to complain, less than half admitted they would make a complaint.