The relationship between suppliers and retailers is generally governed by a code abbreviated as GSCOP, and it is Groceries Supply Code of Practice in full. The code ensures that both retailers and suppliers know what their rights are and they can know the course of action to take when those rights are violated. Some of the benefits of GSCOP are briefly highlighted below.
One of the benefits of the code is that it provides a reference for fair dealing which is crucial since it ensures that things like risks are not transferred. Having the code ensures that a standard is provided between the supplier and the retailer to check for where any deal went wrong. In most cases the code offers a platform for mutual understanding where their is an equal playing field for the supplier and retailer.
An advantage of the code is that it ensures that both parties can understand it since it is very simple and straightforward. According to the agreements, the supplier can only supply the things that the retailers request originally, and they have to be in written form. Retailers, on the other hand, are prohibited from changing their orders once they send a confirmation or original order to suppliers and this makes the working relationship easier.
After the supplier has supplied the grocery items then payments need to be done soon afterwards, and they should not be delayed. The downside of delayed payments for suppliers is that it greatly affected their cash flow and that is why the conduct ensured that such delays should not occur. According to the agreement, payments need to be made as quickly as possible especially if there are no issues or discrepancies with the invoice.
During the supply of certain groceries things like shrinkage or theft may occur, and in the past, that burden was usually transferred to the supplier. As per the code of conduct, things like shrinkages are meant to be the burden of the retailers and not necessarily that of the suppliers since they are responsible for things like safety at the depot. Things like losses as a result of shrinkage is a burden that the retailer carries and in such cases the supplier is not entitled to make payments for such losses, and the code has helped to clarify the issue to prevent suppliers from incurring risks and losses.
The conduct allows for a top buyer of the retailer to review requests and transactions between supplier and retailer. Having an independent third party is very helpful when it comes to deals. When they evaluate the orders, it becomes easy for them to be able to tell who was on the wrong if there is a dispute.