The Co-operative has been forced to apologise over its treatment of suppliers after the grocery regulator opened an investigation into its supermarket arm.
Groceries Code Adjudicator (GCA) Christine Tacon said on Thursday that it has a “reasonable suspicion” that the Co-op broke supply code rules.
The allegations relate to “de-listing and the introduction of benchmarking and depot quality control charges” for suppliers from early 2016 to at least summer 2017.
The GCA has now decided that an investigation is necessary to understand the full extent of the Co-op’s breach, including if the firm followed correct procedure when ditching a supplier.
Ms Tacon said: “It is now important that suppliers provide me with information to help my investigation.
“I am looking forward to hearing what they have to say about whether they have experienced any of the issues now being investigated and if so, the impact on them of the Co-op’s conduct.”
For its part, the Co-op acknowledges that it has “fallen short” and has refunded 110 suppliers £500,000.
It also said it has taken steps to ensure the fair treatment of suppliers.
These include retraining hundreds of commercial staff in the Groceries Supply Code of Practice, writing to its 1,500 suppliers to seek information on any inappropriate delisting decisions and reviewing every case where a supplier was charged for benchmarking and quality control.
Jo Whitfield, chief executive of Co-op Food, said: “We care deeply about our relationships with our suppliers and we are very sorry that in these two areas we have failed to live up to our usual high standards.
“We are already addressing the issues with the GCA and our suppliers and we hope the investigation will help bring to light any additional cases so that we can put these right as quickly as possible.”