Supermarket chain Asda has been forced to pay money back to suppliers after breaching an industry code governing fair dealing.
The company was found to have demanded up front payments worth up to a quarter of the value of annual sales of particular products in order for suppliers to retain their place on the shelf.
Any supplier who refused to make these payments, which were greater than those agreed in suppliers’ contracts, were given notice that they would be ousted within as little as four to eight weeks, according to the industry watchdog.
The regulators review had found that Asda had breached “the overarching principle of fair dealing” in the code with conversations “designed to carry an implication of detriment if any supplier declined to agree” to its demands.
Asda has since engaged with suppliers to rectify the situation and put further safeguards in place to prevent any further breaches.Asda in the dock