The GCA announced on Friday that it had “reasonable grounds to suspect” that Amazon may have violated the Groceries Supply Code of Practice, which governs how the UK’s largest grocery retailers treat their direct suppliers. The probe was launched following evidence received from a range of sources.
This marks only the third investigation by the adjudicator since its inception in 2013. The body has the authority to impose fines of up to 1% of a retailer’s UK turnover, a significant figure for Amazon, which has grown into a dominant force in both tech and retail.
The investigation will focus on whether Amazon delayed payments unreasonably, particularly in relation to its processes for receiving goods, handling deductions from payments, and negotiating settlements during commercial discussions. These alleged practices could pose serious challenges for smaller suppliers, said Mark White, the adjudicator.
“Delays in payment can significantly harm suppliers,” White warned. “The alleged delays could expose Amazon suppliers to excessive risk and unexpected costs, potentially affecting their ability to invest and innovate.”
In addition to delayed payments, the GCA said it had received information about other concerns, including Amazon’s supplier “de-listing” practices and the financial arrangements under which suppliers pay the platform.
Under the GCA’s rules, grocery retailers must settle invoices within the agreed timeframe — and in any case, within a reasonable period after receiving an invoice. The rules apply to retailers with annual grocery sales of over £1 billion in the UK, covering not just food and drink, but also pet food, toiletries, cleaning, and household products.
Amazon responded to the announcement with a statement expressing disappointment but said it would cooperate fully with the investigation. “We take these rules incredibly seriously and we will cooperate fully with the adjudicator as he carries out his investigation,” a spokesperson said. “While we are disappointed with this decision, we welcome the opportunity to further demonstrate our ongoing compliance.”
Previous GCA investigations targeted Tesco in 2015 and the Co-op in 2018. While no fines were issued in either case, the regulator’s powers to impose financial penalties only came into effect after April 2015, making Amazon potentially the first major test of those enforcement capabilities.
The outcome of the investigation could have wider implications for how tech-driven retailers manage supplier relationships, especially as Amazon continues to expand its grocery footprint in the UK.
