image credit: Amazon .com
Amazon was faced with a formal inquiry by Britain’s supermarket regulator on Thursday if it doesn’t comply with an industry guideline protecting suppliers.
The Groceries Code Adjudicator (GCA) reported in its 2024 annual survey that less than half of Amazon’s direct suppliers believed the company “consistently” or “mostly” followed the Groceries Supply Code of Practice.
The Code requires Britain’s 14 top grocery retailers, including market leader Tesco, Sainsbury’s and Marks & Spencer, to treat suppliers fairly. It has applied to Amazon since 2022.
It limits corporations from making last-minute modifications to supply contracts and requires retailers to give an acceptable notice if they want to switch suppliers and explain reasons.
Amazon’s perceived Code compliance score dropped to 47% from 59% in 2023, keeping it in last place, 41 percentage points below Iceland in 13th place on 88%.
“We are very disappointed by these results and we are committed to improving them,” said Amazon.
The GCA advised Amazon to take “swift and comprehensive action” to prove code compliance.
The regulator is following Amazon’s modifications and their effects to assess if they’re enough.
“I will not hesitate to launch a formal investigation if appropriate and necessary to ensure Amazon is treating its suppliers fairly and lawfully,” Groceries Code Adjudicator Mark White said.
The GCA can fine large retailers up to 1% of their UK revenue.
Since last year, Amazon has improved grocery supplier options, including clearer explanations for cost price rise decisions, minimum de-listing durations, and a big invoice dispute enhancement.
We’ll speed up financial dispute resolution and improve account management for smaller suppliers, the person said. Code compliance scores for shops outside Amazon averaged 94%, unchanged from 2023, according to the GCA.
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