Supermarkets to face 1% annual turnover fines for breaches of Groceries Code

3 minute read
24 March 2015


Our food & drink specialists set out what new legislation allowing the Groceries Code Adjudicator to fine UK Supermarket says and how you can offer your views.

Power to fine

Last month we reported that proposed legislation had been laid before Parliament to give the Groceries Code Adjudicator the power to fine UK supermarkets that had breached the Groceries Supply Code of Practice (GSCOP).

Parliament has now approved that legislation meaning the Adjudicator will be able to impose penalties on large supermarkets of up to 1% of their total annual UK turnover (not just turnover of groceries), depending on the seriousness of the breach. The Adjudicator has already published guidance on the principles that will be used to calculate the level of any fine.

The Adjudicator's new powers will only apply to breaches of GCSOP that occur after 5 April 2015; hence, they will not apply to the current investigation into Tesco.

These new measures will sit alongside existing powers to issue supermarkets with recommendations as to their future conduct, and to ‘name and shame’ those that have breached GCSOP.

This now means that the Adjudicator has a complete set of powers. The Adjudicator has indicated that she would prefer to achieve the change promoted by GSCOP by supporting change rather than threatening fines, but having that substantial ultimate sanction means that there is no excuse now not to take the Adjudicator seriously.

Annual survey of the groceries sector

The Adjudicator's annual survey on trading relationships, the performance of GSCOP and the work of the Adjudicator is now live. The survey is open to trade associations and other representative organisations as well as direct and indirect suppliers to retailers.

The Adjudicator has stated the importance of the survey as a key measure for her in assessing progress. All suppliers should, therefore, respond to the survey to ensure the Adjudicator has the complete picture. If you would like to take part please use this link.

For an overview of GSCOP, please see our previous article "The Groceries Supply Code of Practice".

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.

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