Watchdog slams Co-op's treatment of suppliers after breaking industry code

Joe Curtis
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Co-op was ordered to pay £1.3m in costs for the investigation (Source: The Co-op)

The Co-op has come under fire today after a year-long investigation from Britain’s groceries watchdog has found "widespread" failings in its relationship with suppliers.

The Grocers Code Adjucator (GCA) Christine Tacon has demanded that the retail giant makes major changes after breaching several supermarket codes of practices.

Co-op failed to provide reasonable notice to suppliers of decisions to de-list products and varied supply agreements unilaterally and without reasonable notice in the way it applied two specific charges, the GCA said.

Yet Tacon’s findings, which come 18 months after the GCA first launched its probe into the retailer, also concluded that the Co-op's decision was not malicious and no fine will be imposed.

However, the supermarket must pay the £1.3m cost of the investigation.

Tacon said: "The practices and behaviours described in my report were widespread. Systems, processes, business practices and the ability of different parts of the retailer to affect suppliers’ risks and costs of trading with the company all contributed to Co-op breaking the code.

"At the core there was inadequate governance to oversee and manage code compliance."

In response to today’s comments, the Co-op issued a letter of apology to its suppliers.

Jo Whitfield, the Co-op’s food chief executive, said: "We are sorry. We’ve gone to great lengths to put these things right and have undertaken a root and branch review of all our supplier dealings...We were focussed on rescuing the Co-op and doing right by consumers but we should have also given more thought to the potential impact those planned changes would have on our suppliers."

This article was written by retail correspondent Seb McCarthy.