The Groceries (Supply Chain Practices) Market Investigation Order 2009 (the “Order”) has been in force since 4 February 2010.
The Order implemented the Groceries Supply Code of Practice (the “Code”) which applies to certain grocery retailers, including Asda, and governs our dealings with suppliers.
Every year we submit an annual compliance report to the Competition and Markets Authority (the “CMA”) and the Groceries Code Adjudicator (the “GCA”) to detail our compliance with the Code, any alleged breaches of the Code and any disputes with suppliers.
We delivered our eighth report, covering the period from 1 January 2018 to 31 December 2018, to the CMA and the GCA on 30 April 2019.
During the past 12 months Asda has continued to work collaboratively with the GCA, including the GCA’s current ‘Top Issues’ and dialogue around good faith receiving, delisting and supplier funding practices. We would like to thank the GCA for the time and support provided, including visiting Asda Head Office in November 2018 and meeting with our Chief Executive.
During the reporting period, we have taken a number of significant steps to continue to strengthen our compliance controls. These steps included:
The introduction of a new commercial template so that all supplier funding is consistently documented, providing suppliers with the clarity and confidence that all investments are GSCOP compliant
Centralising billing to support our efforts to invoice suppliers correctly first time
Simplification of supplier funding processes
Asda’s CCO spending structured and productive time engaging with suppliers, including on a face-to-face basis. This has helped inform the business to make changes which add as much value to our supplier partners as possible
Continuous improvements to our forensic audit practices, by adopting more collaborative engagement with suppliers and closer dialogue between Asda and the forensic auditors
To reinforce these changes, Asda has refreshed and enhanced its training programme on the Code. New materials use real-life examples and case-studies to encourage group discussion and debate. The training sessions were attended by 420 colleagues from the Buying, Supply, Merchandising and Trading Finance teams between September and December 2018. These instructor-led sessions are supplemented by an online GSCOP training module which all new buying colleagues must complete within one month of starting in role.
We received 22 alleged breaches of the Code during this reporting period. Eighteen of these issues related to delay in payments (thirteen through forensic audit), two related to delisting, one related to a change to supply chain procedures and one related to artwork and design charges. Following investigation into these issues, one alleged breach was deemed to be within the scope of the Code, which related to a payment matter, where a deduction occurred before the issue was resolved. We responded expediently by resolving the issue quickly and to the supplier’s satisfaction.
Where the reportable issue has been closed in the reporting period, we have looked to verify with the supplier that the matter has been resolved to their satisfaction. For all other issues which remain open, we are working collaboratively with the supplier. We can confirm that no new issues were raised as a Dispute as defined under the Order during the reporting period.
Ongoing compliance with the Order and Code is extremely important to us, and we will continue to place the Code at the centre of our relationships with our supplier partners. To support in this objective, we have invited suppliers who attended our category conferences in 2019 to provide feedback via the Annual Supplier Survey. This was complemented by a series of communications from members of our Executive which were circulated through Asda’s Supplier Website.
We welcome our supplier partners to get in contact if they have any GSCOP concerns so that we can support and investigate the matter as a priority. Suppliers can contact our Code Compliance Officer, Sarah Dickson, at: firstname.lastname@example.org.
Date: 30 April 2019