Amazon is facing an official investigation by the UK’s grocery watchdog over its treatment of suppliers.
The investigation will particularly look at the brand’s payment practices.
The Groceries Code Adjudicator (GCA) announced it is probing whether the US-based online retail giant has breached industry rules designed to protect suppliers.
The regulator will specifically examine alleged delays in paying suppliers, deductions made during commercial negotiations, and how Amazon addresses supplier concerns regarding these deductions.
This probe comes almost a year after the GCA issued a stern warning to Amazon, urging the company to take “swift and comprehensive action” to improve its compliance with industry regulations.
The GCA oversees Britain’s 14 largest grocery retailers – including Tesco, Sainsbury’s and Marks & Spencer – to make sure they treat suppliers fairly.
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.
Rules also prohibit late delays in payments from retailers to their suppliers.
Adjudicator Mark White said: “Delays in payment can significantly harm suppliers.
“The alleged delays could expose Amazon suppliers to excessive risk and unexpected costs, potentially affecting their ability to invest and innovate.
“I decided to launch this targeted investigation based on the range of evidence I have seen from multiple sources.”
He called on suppliers and to provide evidence about their experiences dealing with Amazon.
The GCA added that its has received information about “other issues at Amazon”, but provided no further detail about this.
An Amazon spokesman said: “Amazon takes the Groceries Supply Code of Practice incredibly seriously and we will co-operate fully with the adjudicator as he carries out his investigation.
“While we are disappointed with this decision, we welcome the opportunity to further demonstrate our ongoing compliance with this particular section of the code.
“We have already made significant improvements to our grocery supplier experience, including to payment practices, with supplier contacts on this reducing falling year-on-year.
“We will continue to listen and work with our grocery suppliers as we roll out further changes.”
