Lidl has been suspected of breaking the Groceries Supply Code of Practice (GSCOP) by a former supplier and is now facing a £2.6 million court settlement.
Proctor & Associates Ltd is suing Lidl because Lidl abruptly removed 57 of its product lines from its shelves. This caused Procter & Associates Ltd to incur substantial losses and ultimately go out of business.
Lidl has been charged with violating GSCOP’s paragraph 16, which demands that merchants give sufficient notice before delisting a supplier as well as providing written justification for their decision.
According to The Grocer, the claim states: “The claimant has lost profit that it would otherwise have earned during the notice periods to which it was contractually entitled in the total sum of £2,153,425.43.”
Additionally, it asserts that Lidl then purchased produce straight from Proctor & Associates’ own vendors.
Lidl had placed orders totaling over £700,000 in April 2016. The claim contends that over the course of three years, this was cut without warning to £306,000 in 2019, before buying altogether ceased.
Proctor & Associates had a contract to supply Lidl with asparagus from 2008 to 2018 and celeriac from 2006 to 2018, according to paperwork submitted to the High Court last month.
However, Lidl has been charged with stopping orders, without providing written notice, before obtaining the celeriac directly from Proctor & Associates’ farmers through a third party.
Lidl has also been charged with purchasing vegetables directly from Fredrick Hiam Farms, again one of Proctor & Associates’ main product suppliers, who they have a ten-year-long association with.
Other products mentioned in the case include chili, apples, broccoli, pears, plums, and pumpkins.
The Grocer reports that the court papers said: “The defendant placed its last order on 26 October 2018 and thereafter sourced pumpkins direct from growers including the claimant’s grower only informing the claimant of that in August 2019 – well into the growing season and too late for the claimant to make alternative arrangements to supply to others.
“Moreover, in breach of the defendant’s obligation of fair dealing, the claimant understands that the defendant had approached the claimant’s supplier, Oakley Farms, and informed it that the claimant would no longer be supplying the defendant and invited the claimant’s supplier to supply pumpkins directly, the consequence of which was to cut the claimant out of its own supply chain.”
Retail and grocery law firm Gordons LLP, which is Proctor & Associates’ representative for the case claim Lidl has been “cutting the claimant out of its own supply chain, established over many years.”
Source: Grocery Gazette