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Amazon Warned to Improve UK Grocery Supplier Relations

Amazon, Prime Day, grocery, food and beverage

A British regulator wants Amazon to improve its relations with grocery suppliers.

The Groceries Code Adjudicator (GCA) said Thursday (July 11) that it could open an investigation if the tech giant doesn’t turn things around.

This came after the GCA released its annual survey into compliance with the Grocery Supply Code of Practice, which measures how well retailers manage relationships with suppliers.

The survey found that while grocers improved their treatment of suppliers overall, less than half of respondents who supply Amazon thought the company “consistently” or “mostly” complied with the code.

“I will not hesitate to launch a formal investigation if appropriate and necessary to ensure Amazon is treating its suppliers fairly and lawfully,” said adjudicator Mark White. “I encourage suppliers to continue to confidently tell me about the issues they are facing with Amazon.”

The survey found that Amazon’s perceived code compliance score dropped from 59% last year to 47% this year.

Reached for comment by PYMNTS, a spokesperson for Amazon said the companywas “very disappointed by these results and we are committed to improving them.”

They added that Amazon had made a number of improvements for grocery suppliers since last year, with clearer explanations for cost price increases, minimum periods for delisting, and a major upgrade for handling invoice disputes.

“We will be making further changes, with faster time-frames to resolve more types of financial disputes, as well as strengthened account management support for smaller suppliers,” the spokesperson said.
“There is still more to do. We are committed to working with the Groceries Code Adjudicator, building long-term sustainable relationships with our suppliers, and continuing to create opportunities for suppliers of all sizes to reach millions of customers in the UK and around the world.”

Amazon’s grocery business has been overseen by the GCA since 2022, when the U.K.’s Competition and Markets Authority ruled that the company is considered a grocer. Amazon had called the decision “chilling” at the time.

In other Amazon news, PYMNTS’ Karen Webster wrote Thursday about the company’s recent purchase of a minority stake in Saks Global, the company created from Saks Fifth Avenue’s purchase of Neiman Marcus.

“How much of a role Amazon might play in executing a newly-formed Saks Global vision is unknown,” wrote Webster. “Retailers have been unsuccessful at reinventing their future on their own and could use the help.”

She further notes that Amazon’s retail pedigree shows that — per the latest PYMNTS Intelligence data — its apparel and accessories sales came to $23.6 billion in the first quarter of the year, larger than Walmart and Macy’s.

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