Adjudicator rules against Morrisons over deductions

Morrisons has been found in breach of the Grocery Suppliers Code of Practice by the Groceries Code Adjudicator (GCA) for making deductions from suppliers' trading accounts, following complaints from a trade body and from several suppliers.

Morrisons said it asked suppliers for optional "multichannel status" payments of a set amount per product for greater prominence in its new online and convenience channels. It stressed that suppliers who declined to take part were not penalised.

However, in the process of implementing the initiative, a total of 67 suppliers had funds debited from their trading accounts without having agreed to participate.

The GCA found that Morrisons had been in breach of the code by unilaterally making the deductions. The supermarket has since reimbursed the suppliers affected.

But the GCA accepted Morrisons' view that the multichannel initiative was a request and not a requirement to pay a listing fee, so not in breach of the code.

In a separate development, Morrisons has said that from the end of July it will charge suppliers the cost of approving own-label products and ensuring compliance with national and EU legislation.

This will include meeting the costs of implementing new EU food-labelling regulations that come into force in December.

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