So far so good for the GCA

Many argued that her job should never have existed but Christine Tacon can point to four years well spent as the government’s supply chain watchdog. By Nick Hughes.

It is testament to Christine Tacon’s durability that she recently celebrated four years in a job that many politicians and business leaders felt should never have existed.

Not only is the UK’s first Groceries Code Adjudicator (GCA) still in the job but she can also make a strong case for having improved the state of trading relationships between grocery suppliers and their supermarket customers.

In a brutally competitive trading environment, this is no mean feat. A YouGov survey published to coincide with the GCA’s annual conference in June shows that, for the fourth year running, fewer supermarket suppliers say they have experienced issues with the Groceries Supply Code of Practice (GSCOP) in the past year. The proportion stands at 56%, down from 62% in 2016 and from the high of 79% in 2014.

This is still a significant number and questions concerning the GCA’s role and remit persist, but Tacon can take a great deal of satisfaction from gaining a near unanimous thumbs-up from industry stakeholders for her efforts.

The GCA’s smartest move has been to see her role as a mediator rather than a policewoman. Tacon has prioritised collaboration over investigation, necessarily so since her resources – both human and financial – are tight and need to be directed in the right way.

A single, substantial investigation of possible breaches of the code at Tesco showed she meant business, while the threat of investigation has been used to hasten action where progress from retailers has not been as swift as Tacon would have liked.

Tacon’s focus on the top five issues of supplier concern identified by her annual survey has been another effective way of concentrating her attention where it is most needed. For instance, a focus in the past year on retailers charging for product packaging and design – a practice that has irritated suppliers for years – has resulted in just 11% of suppliers reporting concerns with packaging charges this year compared with 30% in 2015.

“Recently a supplier in the fresh produce industry told me that that they had been trying to resolve the problem of overcharging in this area for more than 10 years, but within 18 months of me focusing on the problem he was pleased to say the issue had gone away,” says Tacon. That’s quite an endorsement of the GCA’s effectiveness.

The question for Tacon and food businesses is: what next? The government recently finished consulting on a statutory review of the GCA along with a review on extending its remit. The results are due any day now but industry groups have already made clear they want to see the scope of the GCA’s powers extended.

Many farmers, in particular, feel excluded from the GSCOP because it does not govern relationships with indirect suppliers. The National Farmers Union would like to see this change and is also calling for the GCA’s role to be extended to cover foodservice and wholesale businesses, the largest of which purchase similar volumes of food to some of the smaller retailers that fall within the code.

There is also a suspicion that code compliance is linked to retail performance and when times are tough supermarkets will revert back to their bad old habits. It is noticeable that struggling Asda’s net improvement score was -10% over the past year compared with +60% for a rejuvenated Tesco. With many experts predicting that margins will come under even greater pressure as a result of Brexit the temptation to squeeze suppliers by any means possible may prove irresistible to some.

And although there is encouragement in the largest ever response rate from suppliers taking part in the YouGov survey, up 320% from the first poll in 2014, there is still low awareness of the GSCOP overseas, where 67% of suppliers don’t know it exists compared with just 12% of UK suppliers.

Given the increasingly global nature of supply chains – a trend that may be strengthened by Brexit – this should concern Tacon, as should the statistic that 53% of suppliers say they would not raise an issue with the GCA or are unsure whether they would do so, primarily for fear of repercussions.

Tacon recently confirmed she has committed to continue for another year as GCA while her remit is still being considered by the government. Her decision has been welcomed across the board. However, the evidence suggests Tacon – or a future replacement – will need far longer to ensure there is no backsliding on the murky supply chain practices she has done so much to suppress.

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