GSCOP ANNUAL COMPLIANCE REPORT 2022 – 2023

This report details the actions taken by Lidl Great Britain Limited to ensure ongoing compliance with the Groceries Supply Code of Practice (GSCOP), which came into force on 4th February 2010.

This document also gives account, for the Company’s last full financial year (FY 22/23), of any allegations or disputes that were raised by Suppliers, the level at which they were raised and resolved.

Actions undertaken prior to commencement of GCSOP:

In conjunction with external solicitors:

All existing Terms and Conditions checked for compliance with the Code.

Reference to GSCOP made in relation to all existing contracts.

Review of 2022-2023

In-house compliance measures:

Grocery Code Adjudicator (GCA) Visit to Enfield RDC 19.04.2023:

Lidl GB invited the GCA to visit its Enfield regional distribution centre. The purpose of the visit was to demonstrate depot processes that are relevant to suppliers with focus on Lidl’s Goods In. The visit was accompanied by Lidl’s CFO, CCO and key stakeholders from Lidl’s Logistics, Supply Chain and new Supplier Support teams. The visit included a presentation of Lidl’s depot processes, updates on projects intended to improve both internal communication and communication with suppliers, and a tour of the depot.

Development of Supplier Support Team:

In order to provide increased support to suppliers delivering into Lidl, a Supplier Support Team was set up in November 2022. Following supplier visits to hear how Lidl can work better with suppliers, the team have since supported suppliers and Buying colleagues with increased forecasting data, set up a new process inviting new suppliers to on-boarding meetings to ensure new suppliers are comfortable that they understand how Lidl processes work, and revised the on-boarding information sent to new suppliers. Further projects are in progress to improve communication and collaboration with suppliers.

Training:

A total of 101 colleagues in Buying, Buying Administration and CSR Buying undertook GSCOP training in the reporting period. The e-learning is complemented by quarterly ‘GSCOP Updates’ meetings, which the CCO introduced in November 2020, and which allow the CCO to share GCA news and guidance and inform the Buying team of any updates to internal GSCOP processes.

Internal Review of Policies:

Over the past year, Lidl GB has undertaken the following actions:

Supported the Stock Accounting team in developing a process to settle invoice disputes in certain circumstances.

Introduced a new process to review order data to support with the positive resolution of GSCOP disputes raised by suppliers

Carried out Buying-specific training to ensure awareness of the GCA’s ‘7 Golder Rules’, whilst further improving negotiation, communication, and dispute resolution

Following on from the previous years, there is continued focus on working with suppliers to reduce the number of price differences and quantity discrepancies. Feedback from our Buying and Stock Accounting teams is that this has been particularly successful in relation to price differences.

We continue to monitor Lidl GB’s payment performance.

Disputes:

2 formal disputes have been raised to the CCO under Articles 11(2) or 11(3) of the Groceries (Supply Chain Practices) Market Investigation Order 2009.

Listed below are the instances in which a supplier has escalated a concern that is within the scope of the Code or the Order:

In 2 instances, a supplier concern was raised at level 1 and resolved at level 1 (concern raised with any other party in the business, typically the Buying team). 1 instance was later assessed to be outside the scope of the Code.

In 1 instance, a supplier concern was raised at level 1 and resolved at level 2 (direct contact with CCO).

In 10 instances, a supplier concern was raised at level 2 and resolved at level 2.

In 2 instances, a supplier concern was raised at level 2 and escalated to level 3 (direct contact with CCO, formal dispute raised).

3 instances are reported as ongoing in the reporting period, 1 has been resolved in the time since the end of the reporting period and submission of Lidl’s Annual Compliance Report.

No disputes have been escalated to level 4 (arbitration by GCA or other).