UK grocery watchdog probes Amazon over alleged supplier payment delays
FILE PHOTO: A view shows the logo of Amazon at the Amazon Fulfillment Center during a media tour ahead of the holiday season in Tepotzotlan, Mexico, December 13, 2023. REUTERS/Gustavo Graf/File Photo/File Photo
LONDON (Reuters) -Britain's grocery regulator on Friday launched an investigation into Amazon, probing whether the U.S. retail giant breached rules on timely supplier payments over a three-year period.
The Groceries Code Adjudicator (GCA) said it suspected Amazon of violating paragraph 5 of the Groceries Supply Code of Practice, which mandates prompt payment to suppliers.
"The alleged delays could expose Amazon suppliers to excessive risk and unexpected costs, potentially affecting their ability to invest and innovate," adjudicator Mark White said in a statement.
Amazon did not immediately respond to a request for comment.
White said he launched the investigation, which will cover the period between Amazon's designation in March 2022 and June 2025, based on evidence received from multiple unnamed sources.
The GCA said it would examine the scale and impact of any delays, focusing on Amazon's payment systems, how it handles supplier disputes over deductions, and whether it uses deduction settlements unfairly in commercial negotiations.
Last year, the GCA threatened Amazon with a formal investigation if it did not improve its compliance with the Groceries Supply Code of Practice.
The code aims to ensure Britain's 14 largest grocery retailers, including market leader Tesco, Sainsbury's, and Marks & Spencer, treat suppliers fairly.
The regulator had found in its 2024 annual survey that less than half of respondents directly supplying Amazon believed the U.S. giant "consistently" or "mostly" complied with the code.
At the time, Amazon 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.
The GCA can impose financial penalties of up to 1% of a large retailer's UK turnover.
(Reporting by Sarah Young, additional reporting by James Davey; Writing by Sam Tabahriti; Editing by Joe Bavier)
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