Amazon could face investigation over treatment of suppliers in UK

By James Davy
LONDON (Reuters) – Britain’s market watchdog threatened Amazon on Thursday with a formal investigation if the company did not improve its compliance with a code designed to protect suppliers.
In its annual 2024 survey, the Grocery Code Adjudicator (GCA) found that less than half of respondents who delivered directly to Amazon said they believed the US company was “consistently” or “mostly” compliant with the Grocery Delivery Code.
The code aims to ensure that 14 of the UK’s biggest retailers, including Tesco, Sainsbury’s and Marks & Spencer, treat suppliers fairly. Amazon will be covered from 2022 onwards.
The Code prevents companies from making unexpected changes to supply contracts, and requires retailers to give adequate notice if they no longer wish to use a supplier, stating the reasons for terminating the contract.
Amazon’s known code compliance score fell from 59% to 47% in 2023, with the company maintaining its position in last place, 41 percentage points behind Iceland at 88% in 13th place.
“We are deeply disappointed by these results and are committed to improving them,” an Amazon spokesperson said.
The GCA said it had asked Amazon to take “prompt and comprehensive action” to demonstrate compliance with the code.
The regulator is monitoring Amazon’s changes and their impact to determine whether they are sufficient.
“I will not hesitate to launch a formal investigation, if appropriate and necessary, to ensure that Amazon is treating its suppliers fairly and legally,” said Mark White, responsible for code enforcement at the GCA.
Ultimately, the body could impose financial penalties of up to 1% of a major UK retailer’s turnover.