Amazon’s increasing activity in the UK grocery sector has led the Competition and Markets Authority (CMA) to designate the online giant under the Groceries Market Investigation Order (the Order). As a result, Amazon and its UK subsidiaries must now comply with the Groceries Supply Code of Practice (GSCOP).
The Code applies to retailers with an annual turnover of more than £1bn from grocery sales and aims to ensure that they treat their suppliers fairly.
Adam Land, Senior Director, Remedies, Business and Financial Analysis at the CMA, said: “Households across the UK are increasingly using Amazon to buy food and other essential items. Today’s decision to designate Amazon helps to ensure a level playing field for companies active in the groceries sector as people’s buying habits evolve.
“These rules mean that the thousands of companies supplying Amazon with groceries are now protected from potential unfair business practices.”
He added: “We’ll continue to keep a close eye on the sector to make sure all major grocery retailers are bound by the same rules.”
Once the CMA has designated a grocery retailer, compliance with the Code is managed by the Groceries Code Adjudicator (GCA).
Mark White, the current GCA, commented: “I note the CMA’s announcement that Amazon now needs to comply with the Groceries Supply Code of Practice. I am looking forward to meeting Amazon’s Code Compliance Officer as soon as possible and building on the strong progress that the GCA has made in improving relationships between designated retailers and their suppliers.
“I am here for any Amazon suppliers who experience Code-related issues. They can contact me confidentially, either directly or anonymously via www.tellthegca.co.uk.”
Figures released last week show Amazon’s net sales in the UK rose 20.5% to $31.9bn (£23.6bn) over the year to 31 December 2021. However, compared to two years ago before the start of the pandemic, the figure is up 82.1% from $17.5bn (£13.0bn).
As well as growing its online grocery delivery operation, the US firm’s expansion in the UK during 2021 included 15 Amazon Fresh food stores in London.
NAM Implications:
- The key is the extent to which Amazon feels responsible for the actions of all of its vendors…
