Sainsbury’s told to hold off supplier increases
OFT intervenes over supermarket’s terms change
Sainsbury’s has delayed plans to impose tougher terms on its suppliers after the Office of Fair Trading stepped in to the dispute.
In January, Sainsbury’s wrote to around 1,400 suppliers to say that its payment terms would be changed from March 7. By extending credit for up to four weeks, Sainsbury’s said it was bringing its terms in line with competitors.
Two lobby groups, the Fresh Produce Consortium and the National Farmers Union, raised the matter with the OFT on behalf on suppliers.
The OFT said it “welcomes” Sainsbury’s decision to write to suppliers in dispute to discuss “flexibility” in the implementation of the new code.
Pending resolution of the dispute, the new terms will not be implemented next week, and where suppliers and supermarkets cannot resolve disputes by negotiation, the OFT said its “encourages use of the mediation procedures in the Supermarket Code”.
The OFT said its has “taken no view as to whether Sainsbury’s changes in terms would breach the code. The OFT is however concerned to see that disputes between suppliers and supermarkets are fairly and effectively resolved -if not by negotiation then by mediation.”
The watchdog said the independent audit of supermarkets’ compliance with the code, along with an OFT statement, will be published in the next few weeks.
