Shelf-space payments face GCA scrutiny
The consultation, launched by Groceries Code Adjudicator Christine Tacon, is open to all manufacturers and trade organisations until September 19.
Under the present terms of the Groceries Supply Code of Practice, retailers are prohibited from directly or indirectly requiring payments for better positioning, or an increase in shelf-space – unless for promotions.
However, there is nothing stopping suppliers, which are not covered by the code, offering money for shelf-space.
Tacon told Food Manufacture she was particularly keen on hearing from smaller manufacturers, which she claimed were the most susceptible to the practice.
Encourage small suppliers
“I’m sure there are some very large suppliers that will give me some very considered responses,” she said. “But I also need to encourage the small suppliers to get involved as well, as I want to make sure I get a proper cross-section.”
The consultation was launched following Tacon’s investigation into Tesco, which in January this year found evidence of the supermarket accepting indirect payments for better positioning, along with other offences.
She explained that, “by definition”, the largest suppliers were the ones most able to pay for favourable space. However, Tacon had also heard of examples of smaller suppliers being delisted at the expense of larger firms, despite being able to pay for the space.
“I came across these sorts of scenarios, and they didn’t feel right to me – that’s why I set up the consultation.
“Some suppliers have already made it clear to me that they like the practice, as it works in their interest. I’m expecting to hear from them, but I want to hear from those companies that have been disadvantaged,” she said.
Tacon emphasised that her remit didn’t cover commercial negotiations, but because the Competition Commission had previously ruled that it wasn’t right for retailers to require payments for shelf-space or positioning, she had a duty to follow it up.
Space for money
“The idea that retailers may stock products not on the basis that they might not be the best, the most efficiently produced, or the most wanted by the consumers – but by the amount of money that was paid to them, is where this stems from.
“I want to know how widespread these sorts of situations are. How are they triggered? How did this practice start?” she said.
Tacon was hopeful of publishing her conclusions of the consultation before the end of the year.
