GCA warns against unfair price increase amid inflation pressures

Unfair cost price increases (CPIs) processes between retailers and suppliers could unravel the relationships built during the pandemic, the Groceries Code Adjudicator (GCA) Mark White has warned.

The Adjudicator published a set of “golden rules” for retailers to navigate the increase of CPI demands by suppliers. 

Within the seven rules, White emphasised the need for “clear communication” and prioritisation of smaller suppliers. 

However, he warned that retailers should only ask for “specific information from suppliers that is needed to make a CPI decision” and that there should be no “automatic delists” following said negotiations. 

The final rule reminds buyers to abide by competition law and never ask suppliers about other retailers’ plans or retail prices. 

White also asked suppliers to come forward if their CPI requests were mishandled and that he would be, “particularly interested in hearing about any examples of unfounded claims that the Code requires suppliers to give fixed notice of any CPI.” 

The warning comes as inflation in the UK touched 5.4 per cent, the highest level in three decades. 

According to the Bank of England, the inflation is expected to rise to 6 per cent in April and other forecast analysts said it could reach 7 per cent unless the government intervenes.

White has called on the retailers to build strong and effective relationships with their suppliers.

“I have been strongly encouraging the retailers to ensure they have the right training and support in place to help these new buyers build strong and effective relationships with their suppliers so that they have a deeper understanding of the businesses they are working with,” White said.