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Grocers agree to put time limit on supplier payments

Major grocers including Aldi and Asda have agreed to cut the time they will backdate payments from six years to two, following pressure from the Groceries Code Adjudicator.

According to Retail Week, The Co-op, Lidl, Iceland, Marks & Spencer, Tesco and Morrisons have also signed up to the voluntary agreement, which will mean that retailers’ practice of forensic investigations of suppliers’ accounts to search for money they might be owed will be restricted to the current and two previous financial years.

The agreement marks the first industry-wide deal negotiated by Groceries Code Adjudicator (GCA) Christine Tacon, the industry’s first independent watchdog, to oversee the relationship between supermarkets and their suppliers.

The GCA found that some food retailers had been using forensic accountants to search emails up to six years old to try to make a claim for monies owed, said The Guardian.

Forensic investigations were one of the top five complaints from suppliers received by Tacon in her first year in office and among the most financially damaging, the newspaper said.

Tacon told The Guardian that the new deal would help reduce costs for suppliers, but would be beneficial for the whole industry. “Some of these ideas are about finding more ways to get suppliers to pay for things, but they are just adding complexity and costs for everyone.”

Sainsbury’s and Waitrose both decided not to sign up to the voluntary agreement.

A Sainsbury’s spokesperson told The Guardian: “Given our excellent record in supplier relations, the agreement isn’t really relevant to us. Standardised industry agreements that are voluntary are not the best way forward. Experience shows they can often simply provide camouflage for those who have not seriously addressed an issue.”

A spokeswoman for Waitrose said: “We believe that the length of time is not the issue, the important thing is the manner and the spirit in which the audit is carried out.”

Readers' comments (1)

  • Is there any good story's about supermarkets...all I seem to hear are horror story's from that sector about supplying them..this just seems like another one.
    Forensic accounting going through all your accounts 6 years, looking at what profits you are making and so forth..very very wrong.

    Do they any legal right to actually carry out this type forensic investigation or is part of the deal you have to put up with to trade with corperates.

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