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Amazon ( AMZN ) fares poorly on supplier survey, says industry

regulator

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Amazon ( AMZN ) told to take 'swift action' to comply with industry

code

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Regulator says won't hesitate to launch formal

investigation

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Amazon ( AMZN ) says disappointed, pledges improvement

By James Davey

LONDON, July 11 (Reuters) - Britain's grocery regulator

on Thursday threatened Amazon ( AMZN ) with a formal

investigation if it does not improve its compliance with an

industry code designed to protect suppliers.

The Groceries Code Adjudicator (GCA) said its 2024 annual

survey found that less than half of respondents directly

supplying Amazon ( AMZN ) believed the U.S. giant "consistently" or

"mostly" complied with the Groceries Supply Code of Practice

(GSCOP).

The Code aims to ensure Britain's 14 largest grocery

retailers, including market leader Tesco ( TSCDF ), Sainsbury's ( JSNSF )

and Marks & Spencer ( MAKSF ), treat suppliers fairly.

Amazon ( AMZN ) has been subject to it since 2022.

It restricts firms from making changes to supply contracts

at short notice and also requires retailers to give an

appropriate period of notice if they no longer want to use a

supplier and provide reasons for ending the contract.

Amazon's ( AMZN ) perceived Code compliance score fell to 47% from

59% in 2023, with Amazon ( AMZN ) retaining its position in last place

some 41 percentage points behind Iceland on 88% in 13th place.

"We are very disappointed by these results and we are

committed to improving them," an Amazon ( AMZN ) spokesperson said.

The GCA said it had told Amazon ( AMZN ) to take "swift and

comprehensive action" to demonstrably comply with the Code.

The regulator is monitoring changes that Amazon ( AMZN ) is making

and their impact to determine whether they are sufficient.

"I will not hesitate to launch a formal investigation if

appropriate and necessary to ensure Amazon ( AMZN ) is treating its

suppliers fairly and lawfully," said Mark White, the Groceries

Code Adjudicator.

Ultimately, the GCA can impose financial penalties of up to

1% of a large retailer's UK turnover.

The Amazon ( AMZN ) spokesperson said it had made several

improvements for grocery suppliers since last year's results,

with clearer explanations for cost price increase decisions,

minimum periods for de-listing, and the launch of 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 person said.

The GCA said overall Code compliance scores across the

retailers, excluding Amazon ( AMZN ), averaged 94%, unchanged from 2023.