Friday, June 14, 2024

Amazon must adhere to UK supplier rules after grocery turnover tops 1 bln pounds

The competition watchdog announced that regulations governing how grocers should treat their suppliers will now apply to Amazon’s food retail business in the United Kingdom.

The Competition and Markets Authority (CMA) announced on Wednesday that Amazon must now comply with the Groceries Supply Code of Practice due to its increased engagement in the UK supermarket sector.

The law applies to supermarket shops with yearly sales of more than 1 billion pounds ($1.4 billion). Because Amazon does not disclose data for its UK grocery sales, its inclusion in the code shows for the first time that its sales had surpassed the £1 billion mark.

The code ensures that supermarkets treat their suppliers properly. It prohibits companies from making last-minute modifications to supply contracts, and it compels retailers to give a reasonable amount of notice if they no longer want to utilize a supplier, as well as explain grounds for terminating the contract.

The guideline applies to all of Britain’s major grocery chains, including market leader Tesco (TSCO.L), Sainsbury’s (SBRY.L), Asda, and Morrisons.

“Households across the UK are increasingly using Amazon to buy food and other essential items,” said Adam Land, senior director, remedies, business, and financial analysis at the CMA.

“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.”

Compliance with the code is managed by the independent Groceries Code Adjudicator.

A spokesperson for Amazon said it strived to build successful, long-term relationships with its suppliers and looked forward to working with the Groceries Code Adjudicator.

“We’re happy to partner with tens of thousands of suppliers and provide them with a fantastic shop window in the UK and throughout the world.”

Amazon opened its first 17 physical locations in the UK in 2021, including 15 Amazon Fresh food stores and two Amazon 4-star retail stores.