by James Dewey
LONDON (Reuters) – The UK’s marketplace watchdog on Thursday threatened Amazon with a formal investigation if the company does not improve its compliance with a code designed to protect suppliers.
The Grocery Code Adjudicator (GCA) said its annual 2024 survey found that less than half of respondents who directly supplied Amazon believed the US giant was “consistently” or “mostly” compliant with the Grocery Supply Code.
The code aims to ensure that the UK’s 14 biggest retailers, including Tesco, Sainsbury’s and Marks & Spencer, treat suppliers fairly. Amazon is subject to it from 2022.
The code prevents companies from changing supply contracts unexpectedly and also requires retailers to give adequate notice if they no longer want to use a supplier and explain the reason for terminating the contract.
Amazon’s projected code compliance score fell from 59% to 47% in 2023, with the company maintaining its position in last place, nearly 41 percentage points behind Iceland, which ranked 13th at 88%.
“We are very disappointed by these results and are committed to improving them,” an Amazon spokesperson said.
The GCA said it asked Amazon to take “swift and comprehensive action” to demonstrate compliance with the code.
The regulator is monitoring the changes being made by Amazon and their impact to determine whether they are sufficient.
“I will not hesitate to launch a formal investigation, if appropriate and necessary, to ensure that Amazon is dealing fairly and legally with its suppliers,” said Mark White, head of code enforcement at the GCA.
Ultimately, the body can impose financial penalties of up to 1% of a large retailer’s turnover in the UK.
