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GSCOP Definition & Glossary of Terms

By October 29, 2018Articles by MBM
GSCOP Definition

MBM Glossaries: GSCOP Definition

This glossary contains our GSCOP definition and clarifies terms often used when discussing its application by the Groceries Code Adjudicator. For a better understanding of how GSCOP works and how it can affect you as a Supplier, Retailer, or Consumer, take a look at our GSCOP book.

Acquisition

When one company purchase or acquires another company, Sometimes referred to as a takeover.

Anti-Competitive Practices

Activities that reduce or prevent competition in a certain market.

Arbitrator

An independent third-party body that helps resolve disputes outside of court.

Audit

An inspection by an official representative to determine whether an institution, organisation, or business is compliant to set codes and standards in their industry.

Bargaining Group

A group of farmers or producers who collectively bargain with a processor instead of doing it individually.

Barriers to Entry

The cost needed for a new player to enter the market.

Buying Team

Employees of a retailer who is either: directly involved in purchasing groceries for resale or is in charge of directly managing employees with those duties.

Code Compliance Officer

Also referred to as CCO, this is a third party person who ensures businesses are compliant to regulations. This individual is also responsible for investigating potential violations.

Competition and Markets Authority

CMA is a government department in the United Kingdom that ensures that business competitions grow stronger while preventing anti-competitive practices. CMA took over several functions of the now abolished Competition Commission and Office of Fair Trading.

Competition Commission

Also referred to as CC, the Competition Commission is a public body responsible in investigating markets, mergers and other regulated industries relevant to the United Kingdom’s Competition Law. In 2014, The CC closed and its functions have been transferred to the CMA.

Compliance

The state of abiding by established guidelines, code, or other rules that an industry has set.

Collective Bargaining

When businesses reach a mutually beneficial agreement for a sale or goods or services that have a common supplier or customer.

De-list

To stop purchasing groceries for resale from a Supplier.

Designated Retailer

A retailer in the UK that has a grocery sales turnover exceeding £1billion. Retail giants such as Tesco, Waitrose, Aldi, and Marks & Spencer are included in the list of designated retailers.

Dispute

A report from a Supplier of an alleged breach of the code by a Designated Retailer.

Dumping

Selling a product at a losing price with the intent of driving away the competition to increase market share.

Elastic

A term used in economics, when a small change in price is accompanied by a large change in the quantity demanded.

Exclusive Dealing

When a contracted Supplier obliges a retailer to exclusively purchase from them.

Farm Gate Price

The amount that farmers charge to processors.

Groceries

Includes food, drinks, pet food, household goods, toiletries, and cleaning products.

Groceries Code Adjudicator

Sometimes referred to as ‘Adjudicator’ or ‘Supermarket Ombudsman’, this is an independent body that oversees the enforcement of GSCOP within the United Kingdom. Christine Tacon is the current Groceries Code Adjudicator

Groceries (Supply Chain Practices) Market Investigation Order

A 19-page Order that large grocery retailers in the United Kingdom need to adhere to. GSCOP is a part of this order.

GSCOP

In 2001, the Competition Commission launched an investigation into the groceries market.  This investigation gave birth to the Supermarket Code of Practice that was geared towards governing relationships between suppliers and major supermarkets. Despite the code of practice in place, a number of complaints from smaller retailers and suppliers continued to rise, expressing outcry and dissatisfaction towards major UK supermarkets. This prompted the UK’s office to launch several investigations which eventually led the Competition Commission to create ‘The Groceries Market Investigation Order’ in 2009. This included the Groceries Supply Code of Practice (GSCOP). It is a 7-page document containing a set of codes and guidelines to help achieve a fair and harmonious relationship between Suppliers and major supermarkets.

Inelastic

A term used in economics, when a large change in price is accompanied by only a small change in the quantity demanded.

Limit Pricing

When a company that has a monopoly in a product or industry sets a price that makes it difficult for new players to enter the market and compete.

Market Power

A company’s ability to dictate a price that would beat the competition.  It is also referred to as Monopoly Power.

Market Segmentation

Breaking down target markets into segments to allow a more efficient and manageable approach to marketing. An audience can be segmented by behaviour, lifestyle, demographics, and other specific filters.

Market Size

The number of an audience in a particular market segment. This helps determines whether it is worth pursuing a particular segment.

Marketing Cost

Expenses incurred that are related to the exchange of goods to a consumer or customer. This includes costs used to promote and distribute goods to a point of sale.

Merger

When companies join together to gain market share or strengthen assets.

Office of Fair Trading

OFT was UK’s non-ministerial government department that acted as the country’s economic regulator. The office established the Fair Trading Act 1973 and ensured the healthy growth of business competition while weeding out unfair practices. The office was abolished in 2014 and its functions were transferred to the CMA.

Order

Another term commonly used to refer to The Groceries (Supply Chain Practices) Market Investigation Order.

Payment

Compensation provided for goods or services. This can be in the monetary form or otherwise.

Predatory Pricing

When a business significantly lowers its prices with the intent of greatly reducing competitor sales or even pushing them out of the market.

Price Discrimination

When a company changes the price of a product or service depending on the market and not because of cost-related reasons.

Primary Buyer

Employee’s from a retailer’s buying team who deal with buying from the supplier on a daily basis

Profit

Financial gain after deducting expenses incurred to create a sale.

Promotion

Any offer, discount, or reduced retail price offered to the consumers for a limited amount of time.

Raw Material

Basic materials that are required to produce finished products.

Reasonable Notice

Providing notice within a reasonable time-frame to inform affected parties of upcoming changes. This includes Supply Agreement length.

Retailer

A person or group of people in the United Kingdom who is/are in the business of selling Groceries.

Retroactive Request

Requests to change or amend previously set supply agreements to take effect from a date in the past. These types of changes are prohibited by GSCOP.

Senior Buyer

A person from the retailer’s buying team who manages the Supplier’s primary buyer.

Shrinkage

The allowance made for a reduction in the takings of a business due to wastage or theft.

Supplier

Anyone in the business of providing direct supply to any Retailer of Groceries for resale in the United Kingdom.

Supply Agreement

Any agreement that is recorded in writing following Article 6(1).

Supply Chain

A chain of organisation, events, people, and information needed to move a product or service from producers or suppliers to their intended consumer.

Supply Chain Management

Efficiently managing the movement of goods and services as they go through different channels of a supply chain.

UHT

Milk that has undergone Ultra High-Temperature treatment.

Wastage

Groceries that are unfit for sale after getting delivered to Retailers.


For further tips and information, you can take a look at our GSCOP Book and our GSCOP YouTube Channel. Also, check out our award-winning blog to see more tips and articles.

Interested in training? See how our Training Courses could be of help to you. How about taking a GSCOP Masterclass, with the author of  ‘A Complete Understanding of the Groceries Supply Code of Practice’, Darren A. Smith.

Aileen Artificio

About Aileen Artificio

Aileen has been working in Digital Marketing for the last 8 years, primarily focusing on planning and content creation for businesses and helping them find a voice in an ever-changing digital realm. She is entangled in a perpetual quest to discover tastes around the globe and the stories they offer.

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