The United Kingdom’s grocery industry regulator has initiated a formal investigation into Amazon, following allegations that the American e-commerce conglomerate failed to pay its suppliers promptly, thereby potentially violating Britain’s rules on fair business practices.

The Groceries Code Adjudicator (GCA), an independent office tasked with overseeing the UK’s top grocery retailers, announced on Friday that it had opened an inquiry into Amazon’s payment practices over a three-year timeframe, spanning from March 2022 to June 2025. The decision came after the regulator received multiple complaints suggesting systemic issues in Amazon’s dealings with its grocery suppliers.

According to Mark White, the Groceries Code Adjudicator, the investigation will focus on whether Amazon breached paragraph 5 of the Groceries Supply Code of Practice (GSCOP)—a provision mandating retailers to pay suppliers without unreasonable delay.

“Unjustified payment delays could expose suppliers to significant financial stress and unpredictability,” White stated. “This hampers their ability to invest, plan for the future, and innovate within a highly competitive sector.”

Investigation Follows Repeated Warnings

The launch of this formal probe follows months of scrutiny, during which the GCA had signaled growing concern over Amazon’s compliance with the Code. In its 2024 annual supplier survey, the adjudicator reported that fewer than half of suppliers dealing directly with Amazon believed the retail giant “mostly” or “consistently” followed the Code’s principles.

The findings raised red flags at the GCA, which had warned Amazon that a formal investigation could be imminent unless the company demonstrated rapid improvements in its practices.

Friday’s announcement confirmed that Amazon’s efforts had failed to meet expectations.

“This is not a decision we take lightly,” White emphasized. “But the volume and consistency of concerns raised by suppliers compelled us to take action.”

Key Areas Under Scrutiny

As part of the inquiry, the GCA will examine how Amazon manages its payment systems, particularly in relation to the processing of invoices and resolution of disputes. The regulator will assess whether Amazon’s internal mechanisms have caused undue delays or confusion, and whether the company has used deduction settlements—such as chargebacks or retroactive claims—as leverage in negotiations, in ways that disadvantage suppliers.

One particular focus will be on the fairness and transparency of Amazon’s deductions, especially in cases where suppliers contest the rationale behind withheld payments. The adjudicator will also investigate whether Amazon makes timely and accurate payments across its vast network of food and grocery vendors operating in the UK.

“Our role is to ensure that all designated retailers—regardless of their size or origin—treat suppliers with fairness, clarity, and professionalism,” the GCA explained.

Amazon Responds: Denies Wrongdoing, Commits to Full Cooperation

In response to the investigation, an Amazon spokesperson expressed disappointment over the regulator’s decision but emphasized the company’s commitment to adhering to UK grocery laws.

“We take our obligations under the Groceries Supply Code of Practice seriously and will fully cooperate with the GCA throughout this process,” the spokesperson said. “While we regret the move toward a formal investigation, we welcome the opportunity to demonstrate that we comply with the Code.”

Amazon also noted that it had implemented several reforms since being officially designated under the GSCOP in 2022. These include clearer communication on cost price changes, minimum notice periods for delisting products, and a major overhaul of invoice dispute processes.

However, critics argue that these measures have not translated into noticeable improvements for many suppliers—particularly smaller producers who often lack the bargaining power to challenge delayed payments or unexplained deductions.

Context: What Is the Groceries Code of Practice?

The Groceries Supply Code of Practice (GSCOP) was introduced in 2009 to ensure fair trading between Britain’s largest grocery retailers and their direct suppliers. It applies to the UK’s 14 biggest supermarkets and grocery retailers, including household names like Tesco, Sainsbury’s, Morrisons, and Marks & Spencer.

Under the Code, retailers must follow a set of standards governing how they interact with suppliers—covering areas such as prompt payments, clear contract terms, and respectful treatment. The GCA, established alongside the Code, is empowered to enforce compliance through investigations and penalties.

One of the Code’s central tenets is that suppliers should receive payments within agreed timelines and without unjustified delays. Paragraph 5, in particular, compels retailers to pay suppliers “as agreed, without delay, and in full.”

The GCA also requires all designated retailers to host an in-house Code Compliance Officer (CCO), who serves as a liaison between the company and the regulator and ensures internal adherence to the rules.

Consequences: Potential Penalties for Non-Compliance

If the investigation determines that Amazon violated the GSCOP, the GCA has the authority to impose significant penalties. The regulator can issue fines of up to 1% of a company’s UK turnover—a potentially massive sum for a business the size of Amazon.

Given Amazon’s dominant position in both online and physical grocery sales in Britain, a penalty of this magnitude could equate to hundreds of millions of pounds, depending on the final findings.

Beyond financial penalties, a negative ruling could damage Amazon’s relationship with suppliers, many of whom rely on the platform for visibility and distribution in a fiercely competitive retail environment.

“Retailers must understand that fairness isn’t optional—it’s a legal obligation,” said one industry consultant familiar with the matter. “If large retailers exploit their size to delay payments or shift risks onto suppliers, the entire supply chain suffers.”

Broader Industry Reactions

The news has sent ripples through the UK’s retail sector. Trade associations representing food producers and small businesses have welcomed the investigation, viewing it as a long-overdue step toward holding dominant players accountable.

The National Farmers’ Union (NFU) and the Federation of Small Businesses (FSB) both issued statements applauding the GCA’s decision. They highlighted that timely payments are essential for maintaining cash flow, investing in equipment, and sustaining local economies.

Meanwhile, competing retailers, including Tesco and Co-op, have remained silent on the development, although insiders say the industry is watching closely for the outcome, which could set new precedents for payment and contract enforcement.

Looking Ahead: What Comes Next?

The GCA has not provided a specific timeline for the investigation’s conclusion, but industry experts expect a comprehensive process involving data requests, supplier interviews, and operational audits of Amazon’s grocery division.

Mark White urged suppliers to continue submitting evidence, ensuring that the investigation captures a complete picture of their experiences.

“We invite any supplier with relevant information to come forward. Your voices matter,” he said.

In the meantime, the regulator is expected to publish interim findings by the end of 2025, with a final report and potential enforcement actions likely in early 2026.

For Amazon, the spotlight is now squarely on its internal practices—especially as global regulators, including the European Commission and U.S. Federal Trade Commission, continue examining its market dominance across various sectors.