GCA Conference – Drop and Drive Claims Workgroup Update

Posted by Jonathan Kittow on 23/06/15 16:25

 

Christine Tacon delivered her annual review of the progress the GCA had made in the last 12 months. The key achievement being the agreement from 8 of the 10 retailers to restrict future forensic audits to a maximum of 2 prior years’ activity (plus the current year).

The Tesco investigation was mentioned, but without detail and two arbitration are still running from last year.

The progress on her remaining top 5 can now be summarised as:

  1.        Forecasting and Service levels: The intent is to move to a position of shared risk for promotional forecasts, where the retailers will NOT penalise suppliers for their inability to supply significantly higher volumes than forecast.
  2.        Lump sum requests; defined as an ‘unexpected request or margin maintenance request’.
    This will be addressed by the CMA review of supply agreements, due to publish its initial findings in September
  3.        Packaging and Design Changes: Suppliers cannot be mandated to use a single supplier, but could be asked chose from a selection approved suppliers, or propose a supplier of their own, at lower cost.
  4.        Customer Complaints; Still being investigated, but the focus is to ensure retailers are not ‘profiteering’ from customer comaplents.
  5.        Delays in Payments:
    The GCA interpretation extends delays to include ‘deductions without agreements or withholding total invoice payment for an error on part of the invoice’.

As such, whilst Drop and Drive is ‘Closed’ as a top 5 priority it remains a key aspect of ‘Delays in Payments’ and therefore is still considered a priority by the GCA and the CCOs.

This was further endorsed by the CCOs from Tesco, Morrisons and Co-op, with whom I spoke yesterday, who all reiterated their support for the Workgroup and invited me to raise any concerns about the current progress stalling, so they could apply pressure at the appropriate level.

I will provide an update in the next two weeks on the progress with the top 5 retailers, all of whom are expected to confirm their plans to improve the process and/ or announce next steps to do so within the next few weeks.



CONCLUSION:

Not only are we making good progress with all of the top 6 retailers, but it is vital to capture the claims data and share it with us, so we can keep the pressure on the current retailers to execute the agreed plans and find alternative solutions that will eliminate the differential between the consistently accurate delivery of most products and their current deduction levels.



 

 

Topics: Drop and Drive

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