An Rialálaí Agrabhia Survey: 1 in 9 Suppliers Report Unfair Trading Practices

An Rialálaí Agrabhia, the agri-food regulator, released its second annual supplier survey, revealing insights into relationships between nearly 500 suppliers and eight major grocery retailers and wholesalers: Aldi, BWG Foods, Dunnes Stores, Lidl, Marks & Spencer, Musgrave Group, Sysco, and Tesco. The survey, covering over 1,300 trading relationships, found high compliance with unfair trading regulations, though one in nine respondents reported being subject to a Unfair Trading Practice (UTP), down from one in seven last year.

Despite overall compliance, suppliers reported serious issues, including short-notice cancellations of perishable product orders, late payments, and fear of retaliation for reporting UTPs. The report highlighted systemic pressures like rising costs suppliers cannot pass on, buyers' pricing power, fixed-payment processes, and limited negotiating leverage for smaller suppliers. This leads to suppliers not feeling on equal footing, lacking clarity, and facing financial strain. Power imbalances, inconsistent buyer access, and communication gaps exacerbate these issues.

Specific concerns included unrealistic downward pressure on pricing, retailers not accepting price increases due to climate change or wage hikes, and extended payment timelines, particularly for smaller suppliers who lack the leverage of larger counterparts. A significant fear factor prevents many suppliers from reporting UTPs, driven by concerns of delisting, exposure, or easy identification, making reporting a last resort. Many suppliers also lack clarity on how to report issues.

An Rialálaí Agrabhia is seen as a "comforting presence," especially for smaller operations, despite some uncertainty about its reporting processes. CEO Niamh Lenehan noted ongoing work to build supplier confidence. In December, the regulator will gain enhanced powers to compel businesses to provide market data and issue fines for non-compliance, aiming to improve transparency and oversight in agri-food supply chains. This is expected to strengthen its role in addressing supplier-buyer relationship challenges.