Lidl sued for £2.6m by grocery supplier for ‘destroying business’

Lidl sued for £2.6m by grocery supplier for ‘destroying business’

22 Dec    Finance News, News

Lidl is being sued for £2.6m by a fruit and vegetable supplier that claims it was wrongly cut out of deals by the discount chain in a series of moves it alleges “destroyed our business”.

Proctor & Associates, which once supplied Lidl with up to 57 different kinds of fruit and vegetable, has filed a claim at the high court in which it says it had to stop trading after the German-owned discounter delisted a number of its products, including asparagus, squash, chillies, apples, plums and broccoli, without notice and poached Proctor’s suppliers.

Deane Proctor, the managing director of Proctor & Associates, said: “We built our business for and around Lidl’s needs. Despite that, I feel like Lidl stabbed us in the back. They took our suppliers and delisted us without notice.

“I think over the last eight years or so Lidl have destroyed our business. Suppliers are scared to do anything because Lidl could delist them. Lidl aren’t above the law. They should be held to account by suppliers and the GCA [the Groceries Code Adjudicator].”

In one example cited by the Grocer trade journal, which first reported the case, Proctor & Associates said it had supplied squash to Lidl for 11 years, until 2019, when it alleged the retailer stopped its orders without notice and used a third party to source the product from Proctor’s main supplier, RE Stacey.

In 2019, Lidl is said to have gone directly to Proctor’s main supplier for ready-packed vegetables for use in soups and stews, Frederick Hiam Farms, cutting Proctor out of the loop.

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The suit says such practices breach the Groceries Supplies Code of Practice, a set of rules for dealing with suppliers by which large retailers must abide. The rules are overseen by the GCA – currently Mark White – who can carry out investigations and issue fines of up to 1% of UK sales if he finds wrongdoing.

It is understood that Proctor brought a private legal case with the help of law firm Gordons, rather than calling for intervention by the adjudicator, because that allowed it to claim compensation for loss of business.

The GCA said it would not comment on Proctor’s claims because of the ongoing legal case.

Earlier this month White said he had “intensified” talks with supermarkets, partly because of concerns about products being delisted without reasonable notice.

In a GCA survey of 2,500 suppliers, published in June, one in five suppliers said they had an issue with products being delisted without reasonable notice. Lidl came last in the survey.

A spokesperson for Lidl said: “We are in the process of reviewing the claim and will be responding in due course.”

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