The UK’s grocery watchdog has initiated an investigation into Amazon amid claims that retail and tech firms have been remiss in timely payments to suppliers.
The Groceries Code Adjudicator (GCA) indicated that there was a “reasonable basis” for suspecting Amazon of breaching certain grocery supply codes.
This scrutiny comes nearly a year after the GCA urged online retailers to take “swift and inclusive actions.” to enhance adherence to industry regulations intended to safeguard suppliers.
The GCA oversees the relationship between the 14 largest grocery retailers in the UK and their direct suppliers, which includes major supermarkets like Tesco and Sainsbury’s.
This investigation into Amazon’s grocery sector marks the third since the GCA was established in 2013, following inquiries into Tesco and Co-op. The watchdog has the authority to impose fines of up to 1% of a company’s sales if it is found to have breached grocery codes.
Judge Mark White remarked: “Payment delays can severely damage suppliers. Such allegations could expose Amazon’s suppliers to undue risks and unforeseen costs, potentially hindering their capacity for investment and innovation.”
In the UK, Amazon retails food through its Fresh branded stores and online platforms, in addition to managing the Whole Foods chain, acquired in 2017 for $13.7 billion (£10.2 billion).
According to a GCA survey conducted in 2024, suppliers have reported more issues with Amazon than with other retailers.
Following a warning to Amazon last July, the GCA stated it has been monitoring retailers’ conduct and has gathered detailed testimonies regarding suppliers’ experiences.
On Friday, the GCA noted it has grounds to believe that Amazon violated paragraph 5 of its grocery code between March 1, 2022, and June 20, 2025. However, it intends to concentrate its investigation on the period starting at the beginning of 2024 to gain clearer insights into Amazon’s present practices.
The watchdog is calling on suppliers to submit evidence by August 8th, assuring them that all submissions will remain confidential.
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The GCA also stated it has received information about various other concerns related to Amazon, asserting it would “not hesitate” to initiate additional investigations as needed.
In a previous case, the GCA criticized Tesco for its treatment of suppliers after a year-long inquiry but found the Co-op unpunishable in 2015 due to the timing of the alleged misconduct relative to the enhanced powers given to the GCA by the government.
Amazon commented that it takes the groceries code of practice seriously and that it “works closely with the arbitrator.”
A spokesperson stated: “While we are disappointed by this decision, we welcome the chance to further demonstrate our continued compliance with this specific section of the Code.
“We have already made significant improvements to the experience of our grocery suppliers, particularly regarding payment practices.
“We will continue to listen and collaborate with grocery suppliers as we implement further changes.”
Source: www.theguardian.com
