Code of Practice

1337 Words6 Pages
The first section set up in the code of practice is the standard terms of business, which states that the terms of business have to be available in writing at the request of the supplier. It also states that reasonable notice of variation of a supermarket’s terms of business shall be given to the affected supplier. The final part in this section states A Supermarket shall pay a Supplier for products delivered to that Supermarket's specification within a reasonable time after the date of that Supplier's invoice. The standard terms of business section is used to ensure that the supermarkets do not change terms of the agreed contact without informing the supplier. This makes sure the supplier will have a guaranteed income for a set period of time allowing them to plan for the future. The second section of the code of conduct is prices and payments and it states no retrospective reduction in price without Reasonable Notice. This is to ensure the supermarkets pay the price they had agreed to buy the goods for and they are not legally allowed to lower the price after the products have been sold. This is good news for the suppliers as the supermarkets were using this as a tactic to reduce the cost as the supplier would have been forced to accept the lower price with no other option as the goods had already been sold and possibly used by the supermarkets. It also states that the supplier has no obligation to contribute to any marketing costs. This has come into force due to the supermarkets asking the supplier to fund deals such as two for one or half price sales. As this was used to boost supermarkets sales and increase customer loyalty the code of practice makes it illegal for the supermarkets to force this on the supplier and it cann... ... middle of paper ... ...suppliers mind at ease as they know they supermarket staff will be trained according to the code of practice which means the dealings should also be as specified in the code of practice. In conclusion it has been shown that although the code of practice has had its criticism from suppliers it has gone far enough to ensure the fair practicing between the supermarkets and its suppliers. It has done this by listening to the issues that arose between the two sides and made effective compromises to ensure both companies could continue to trade effectively. Each point in the code of practice has been designed to stop the problems that were continually coming up between the two sides and have effectively stopped the buying power of the supermarkets from damaging the way suppliers work and they can now trade without fear of losing the business of the supermarket unfairly.
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