By Mauro Orru


A U.K. government agency said Amazon.com risks a formal investigation if the e-commerce giant doesn't improve its treatment of grocery suppliers, a sign that regulators on the other side of the Atlantic are ready to step up scrutiny of the company's market power and labor practices.

The Groceries Code Adjudicator, the watchdog that regulates relationships between grocery retailers and their direct suppliers in Britain, said that fewer than half of Amazon's suppliers felt the company complied with its code of practice, according to a recent survey.

"I will not hesitate to launch a formal investigation if appropriate and necessary to ensure Amazon is treating its suppliers fairly and lawfully," said Mark White, head of the GCA.

The regulator said Amazon's compliance score with its code of practice had fallen to 47% in this year's survey from 59% a year earlier, putting the U.S. retail group in last place out of 14 retailers. The survey, which garnered more than 3,000 responses, ran from mid-January until Feb. 25.

"The survey shows clearly that many suppliers do not believe that Amazon is complying with the code," White said. "I encourage suppliers to continue to confidentially tell me about the issues they are facing with Amazon."

The regulator told Amazon that it must take steps to improve its compliance with the code and ensure that suppliers fully understand any changes the company makes.

"We are very disappointed by these results and we are committed to improving them," an Amazon spokesperson said. "Amazon takes the Groceries Code extremely seriously and we have introduced robust compliance procedures for our suppliers."

The group said it had already introduced a new process to explain the rationale behind cost price increases as well as a new dashboard that lets suppliers raise and resolve disputes with Amazon.

"We will be making further changes, with faster time-frames to resolve more types of financial disputes, as well as strengthened account management support for smaller suppliers," the spokesperson said. "There is still more to do."


Write to Mauro Orru at mauro.orru@wsj.com


(END) Dow Jones Newswires

07-11-24 1210ET