The UK’s Chartered Institute of Procurement and Supply (CIPS) has outlined plans that would require the chiefs of the country’s retail companies to apply for a licence.
The proposal is in response to criticism of several major UK retailers consumer goods groups for their treatment of suppliers. There has been evidence of companies extending the amount of time it takes to pay suppliers, retrospectively changing terms, and demanding extra fees to support new strategies.
David Noble, chief executive (CEO) of CIPS, said the proposed system would be a form of “self-regulation” and has held talks with key bodies in the UK retail industry and government officials to outline the details.
However, CIPS also want to introduce the licencing system to improve how companies monitor their suppliers, to prevent malpractice and any repetition of the scandal that resulted in 2013 when a range of supermarket food products were found to contain horsemeat.
Research by CIPS has found that only 11% of UK businesses have a close relationship with suppliers at all stage of their supply chain, while 72% admitted that they could not be certain there was no malpractice in their supply chain. Eleven per cent of business leaders said that it is likely modern slavery is already playing a role in their supply chain.
Noble said he was “very concerned” about the relationship between retailers and suppliers. “Cultural change is necessary and that comes from the top,” he commented and a licencing system was essential if there is to be “the real step change we need in the retail industry”.
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