Arbitration Hearings on the Rise Amid Cost Price Challenges
- Inflation strains supermarkets’ relationships with suppliers
- GCA reveals increase in arbitration hearings due to cost price issues
- 26% of suppliers faced refusal or unreasonable delay for CPI requests
- 16% experienced de-listing without reasonable notice
- Grocery sector facing supply chain shortages and higher costs
The rising inflation and cost price pressures have led to a deteriorating relationship between UK supermarkets and their suppliers, as revealed by the Groceries Code Adjudicator (GCA). Supermarkets are now facing an increasing number of arbitration hearings due to the surge in requests for Cost Price Increases (CPI), which often result in short notice de-listing. A YouGov survey showed that 26% of suppliers faced refusal or unreasonable delay from retailers regarding CPI requests, while 16% experienced de-listing without proper notice (up from 12% in 2021). The GCA described the grocery sector as facing a ‘perfect storm’ of supply chain shortages, higher energy costs, and raw material/ingredient expenses. Out of 2,500 surveyed suppliers, 80% requested at least one CPI within the past year. Adjudicator Mark White expressed concern over the impact on relationships and urged retailers to treat suppliers fairly during these challenging times.
Factuality Level: 8
Factuality Justification: The article provides accurate information about the impact of inflation and cost prices on supermarkets’ relationships with their suppliers based on a survey by the Groceries Code Adjudicator (GCA). It includes relevant data from the survey and quotes from the adjudicator. However, it could provide more context or background information on the grocery sector and the GCA to make it more informative for readers who are not familiar with these topics.
Noise Level: 3
Noise Justification: The article provides relevant information about the impact of inflation on supermarkets and their relationships with suppliers, and highlights the findings of a survey conducted by the Groceries Code Adjudicator. It also mentions the increase in arbitration hearings and de-listing issues. However, it lacks analysis or exploration of long-term trends or consequences, as well as actionable insights for readers.
Financial Relevance: Yes
Financial Markets Impacted: UK supermarkets and suppliers
Financial Rating Justification: The article discusses inflation, cost price increases, and supplier-retailer relationships in the UK grocery sector, which can impact financial markets through changes in pricing and supply chain management for these companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the last 48 hours.
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