Reviewing a supply agreement with a supermarket or big retailer

A supply agreement with a supermarket or a national retailer is the retailer's document: its terms of trade, its supplier manual, its promotional and marketing contributions, its deduction rights and its delisting powers, offered to the supplier as the terms of the listing. What the supplier can negotiate is narrower than in other contracts, and what it needs to understand is wider. I review the agreement from the supplier's side and return it marked up with a written explanation of the changes worth asking for, the terms the Groceries Supply Code of Practice already controls, and how to price the rest, for a fixed fee of £895 in five working days.

Who this is for

Food, drink, household and consumer goods suppliers in England and Wales that have won or are negotiating a listing with a supermarket, a discounter, a department store, a DIY chain or an online retailer, and have been sent the retailer's supply agreement, trading terms and supplier handbook. Both parties are businesses; consumer law matters for the product the retailer sells to the public.

What to look for in a supermarket supply agreement

The Groceries Supply Code of Practice and who it protects

Where the retailer is one of the large grocery retailers designated under the Groceries Code Adjudicator Act 2013, the Groceries Supply Code of Practice is incorporated into every supply agreement for groceries and cannot be excluded. The Code requires the retailer to deal fairly and lawfully with suppliers, prohibits retrospective variation of supply terms, restricts payments demanded for listing, shrinkage and wastage, requires reasonable notice and reasons before delisting, and gives the supplier access to a senior buyer and to the Groceries Code Adjudicator. The review identifies which terms the Code already overrides, so the supplier does not negotiate what it already has, and which terms the Code does not reach because the retailer is not designated or the products are not groceries.

Listing, delisting and the forecast you are asked to supply against

The agreement should say how long the listing runs, what notice the retailer must give to delist a line and what reasons it must give, and what happens to stock, packaging and raw materials the supplier has bought against the retailer's forecast. The review checks that forecasts are stated to be non-binding on the retailer but binding on the supplier, and asks for the retailer to take or pay for finished stock and bespoke packaging on delisting or on a forecast reduction outside an agreed tolerance. Where the Code applies, delisting requires reasonable notice and reasons; where it does not, the agreement is the only protection.

Promotions, marketing contributions and deductions

Retailers fund promotions, category reviews and marketing from supplier contributions, and deduct them from invoices, alongside deductions for shortages, damages, late delivery and non-compliance with the supplier manual. The review checks that every contribution and deduction is provided for in the agreement rather than in a manual the retailer can change, that deductions are notified with evidence and can be disputed before they are taken, that promotional funding is agreed in writing per promotion, and that the retailer cannot require payment for wastage or shrinkage that the Code prohibits demanding.

Product specification, own-label and liability

Where the product is own-label, the retailer is the business under whose name it is sold and the review checks the specification, approval and labelling responsibilities described on the co-packing page; where it is branded, the supplier is the producer. Either way the supplier will be asked to indemnify the retailer for product liability under Part I of the Consumer Protection Act 1987, for recalls, and for the retailer's costs of customer complaints. The review asks for the indemnity to be limited to defects in the supplier's product, for recall costs to be evidenced, for the retailer's own handling and storage failures to be excluded, and for the insurance the supplier is required to carry to match the indemnity. The Food Information Regulations 2014 responsibilities should follow the name on the pack.

Payment terms, payment practices and set-off

Payment terms will be long and set-off rights wide. The Late Payment of Commercial Debts (Interest) Act 1998 applies unless the contract provides a substantial remedy, and large retailers must publish their payment practices under the Reporting on Payment Practices and Performance Regulations 2017, which the supplier can read before agreeing to terms. The review checks the payment period, the invoicing procedure, the retailer's right to set off disputed sums, and whether early payment is available only through a supply chain finance scheme at a discount. Where the retailer is designated, the Code requires payment in accordance with the supply agreement and prohibits delay without good reason.

Exclusivity, ranging, price and termination

The agreement should say whether the supplier may sell the same product to other retailers, whether the retailer may require a price match or most favoured customer treatment, and how cost price increases are requested and agreed. A term that restricts the price the supplier charges other customers is one to examine under section 2 of the Competition Act 1998. The review also checks the retailer's termination rights, the notice period, and whether the retailer may continue to use the supplier's brand and imagery after termination.

What it costs

Complex review, £895. Heavily negotiated or unusually complex documents. Five working days.

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The retailer says its terms are standard for all suppliers. What can we change?

The listing terms will not change, and the review says so. What moves is what sits around them: forecast tolerances, the treatment of bespoke packaging on delisting, evidence before deductions, the scope of the product liability indemnity and insurance, and the procedure for cost price increases, which are the points suppliers do negotiate.

Does the Groceries Supply Code of Practice apply to us?

It applies where the retailer is designated under the Groceries Code Adjudicator Act 2013 and the products are groceries as the Code defines them. If so, the Code is part of your agreement whatever the document says. The review confirms whether you are covered and which of the retailer's terms the Code already overrides.

They want us to fund promotions and pay for shelf space. Is that allowed?

Promotional funding agreed in writing for a specific promotion is normal. Payments for listing, better positioning, shrinkage or wastage are restricted where the Code applies. The review separates the contributions you can be asked for from the ones you cannot, and asks for every deduction to be evidenced and disputable before it is taken.

Related guidance and services

• Contract review, £895, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a private label or co-packing agreement
• Reviewing a supplier agreement from a large customer

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.