Morrisons slammed for breaching the groceries code

The ruling followed complaints about Morrisons’ multi-channel initiative, following its move into convenience and online sales.

The retailer acknowledged that it had asked suppliers for “an optional ‘multi-channel status’ payment of a set amount per product” ​covering the selection of products available through its online business and smaller format convenience stores.

The retailer said it stressed to its suppliers involved in the selection process that it was requesting support but that this was not a requirement. “We asked suppliers for an optional ‘multi-channel status’ payment of a set amount per product. Through multi-channel status suppliers’ products would be offered greater exposure and sales opportunity,”​ said the retailer.

‘Negative consequence’​

Suppliers that did not wish to take multi-channel status have not had any “negative consequence”​ in their trading relationship with Morrisons, said the store.

But the adjudicator ruled the retailer had overcharged 67 suppliers. “Wm Morrison Supermarkets plc has breached the code by unilaterally making deductions from the trading accounts of 67 suppliers,”​ ruled the adjucator. “This is in breach of part three of the code – variation of supply agreements and terms of supply. We note that Wm Morrison Supermarkets plc has since rectified this and reimbursed the suppliers affected.”​

A spokeswoman for the retailer told Foodmanufacture.co.uk: “We mistakenly took payments from a small number of suppliers and these were paid back as soon as we discovered the error. We made these refunds without any prompting.”​

‘Mistakenly took payments’​

The adjudicator accepted the retailer’s view that the multi-channel initiative was a request to suppliers and not a requirement to pay a listing fee.

In a separate development, Morrisons has written to suppliers asking them to contribute to the costs of complying with new legislation covering food labelling, set out in the EU’s Food Information for Consumers Regulation, due to be enforced from December 13 2014.

The spokeswoman said: “We make it clear to suppliers that we share the costs associated with the system we have to manage. We gave plenty of notice to our suppliers about the development and process changes we have made.”​

Earlier this year, Christine Tacon, who leads the GCA, pledged to crack down on retailers charging suppliers hundreds of thousands of pounds for discrepancies on promotions​ going back up to six years.

Tacon said: “The biggest complaint I get of all is what I call forensics. This is when retailers are using no-win, no-fee third parties to go through books up to six years previously and find evidence of promotions or sampling campaigns or some reason why the supplier owes the retailer some money.”​

Meanwhile, Morrisons’ rival Tesco today (June 4) revealed its third consecutive quarter of falling sales​.