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.
It is understood that complaints were raised about Asda taking incorrect deductions from invoices without notice, requesting lump sums to make up profit margins, and conducting “abusive” forensic audits of suppliers’ accounts.
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.
