Amazon.com Inc’s food retail business in the UK must obey regulations on the treatment of suppliers, the Competition and Markets Authority (CMA) ruled today.
The Groceries Supply Code of Practice applies to all retailers that turnover more than £1bn a year in grocery sales, which the US giant has reached for the first time.
The code focuses on the fair treatment of suppliers by restricting companies from altering supply contracts at short notice and requires retailers to provide lengthy warnings if they intend to change suppliers whilst also providing reasons.
Amazon’s rising activity in Britain’s grocery sector means it joins big supermarkets including Tesco PLC (LSE:TSCO), J Sainsbury PLC, Asda and Morrisons in following the code.
“Households across the UK are increasingly using Amazon to buy food and other essential items," Adam Land, CMA senior director, and business and financial analyst, said.
"Today’s decision to designate Amazon helps to ensure a level playing field for companies active in the groceries sector as people’s buying habits evolve," he added.
Last year Amazon opened its first 17 UK physical stores – 15 Amazon Fresh shops and two four-star retail stores.
Amazon strives to build successful, long-term relationships with its suppliers and is excited by the prospect of working with the Groceries Code Adjudicator, one of its spokespeople said.