CODE OF PRACTICE FOR RETAILER / SUPPLIER RELATIONS IN THE EUROPEAN HOME IMPROVEMENT SECTOR
This code lists some general principles which characterize behaviour and relations within the European Home Improvement supply chain, based upon fair cooperation, long term relationships, mutual understanding and respect.
The Code does not contradict existing legislation nor national codes of fair conduct where they already exist. Its purpose is to emphasize what has to be continued, developed or implemented to ensure a high standard of responsibility among companies belonging to the European Home Improvement Industry in the areas of sustainability, employment, environment and health.
Relations in the Home Improvement Sector supply chain have evolved in a largely positive way, due partly to the distinct nature of our supply chain. For example, relatively long stock turn times and the considerable size of some of the suppliers in our sector make the home improvement sector quite distinct from other areas of retail, in particular grocery retail.
Relations between retailers and suppliers in the home improvement sector are characterised by a partnership approach, for instance in gardening products, a range of plants will need to be agreed upon and developed by the retailer and supplier in close cooperation, up to 12 months before they are put on the market. It is thanks to this relationship that we have been able to develop a European voluntary code of conduct based on existing good practice.
Principle 1: Commercial Contracts
- Suppliers and Retailers abide by the contractual commitments that they have negotiated freely, which should not contradict existing legislation;
- Terms of business to be available in writing for both parties;
- The terms of business shall be respected by both Retailers and Suppliers;
- Reasonable notice of variation of a Retailer or Supplier’s terms of business shall be given to the other party within a minimum period agreed in advance.
Principle 2: Orders
- Orders shall respect agreed terms of business between Retailer and Supplier, such as prices, packaging, quantities, freight cost, delivery time;
- Both parties agree to work together to best ensure accurate forecasts are made where possible;
- In case of EDI orders, both parties shall make sure all necessary information has been well updated before interacting on EDI;
- Both parties recommend growing their EDI relationship in the future.
Principle 3: Prices
- Any change in prices and conditions shall be communicated before implementation by supplier to retailer within a reasonable time, previously mentioned and agreed by both parties.
Principle 4: Delivery
- The Supplier shall deliver the ordered goods at the agreed time to the named point, in faithful performance of the Supplier’s duties. In case of delay, not related to “force majeure”, the Supplier shall compensate the Retailer according to specifications previously mentioned and agreed by both parties in the business contract;
- Where possible, orders should reflect previous agreements between the retailer and supplier;
- The Retailer shall accept on-time deliveries. If not, the Retailer shall fully compensate Supplier for any additional costs linked to such refusal.
Principle 5: Payments
- The Retailer shall pay the Supplier according terms and conditions previously agreed;
- The terms and conditions, written in a commercial contract, shall not be unfair nor contradict existing legislation;
- In case of litigation, no deduction nor delay of payment should be made without prior agreement between both parties.
Principle 6: Sustainable Development
- Suppliers and Retailers commit to supporting measures designed to reduce household carbon footprint, such as measures to promote sustainable consumption and production and improvements in eco‐design and labelling;
- They commit to sharing information on risks to the supply chain arising in the developing world (e.g. deforestation, labour & production practices) and to work together to eradicate their future occurrence;
- To take action to remedy any instance of child labour in the supply chain;
- Where possible and practicable, Retailers and Suppliers commit to labelling origin on imported products; to convey consumer information on environmental sustainability and alternative energies;
- Retailers and Suppliers will work to favour regenerative, renewable, re‐usable or recyclable resources, e.g. concerning packaging.
Principle 7: Information Sharing
- Aware of the problems associated with transportation, Retailers and Suppliers agree to a steady improvement in service quality along the supply chain through a comprehensive exchange of information between representatives of both associations;
- Retailers and Suppliers commit to working toward greater performance improvement across their operations in order to continually increase value for consumers;
- In order to ensure that best practice is respected by all parties, EDRA and Fediyma representatives commit to periodically meet to review progress being made.
Principle 8: Quality of Life and Products
Both parties agree
- To comply with or exceed the basic standards of providing healthy living and working conditions established by the European Union;
- To provide that goods used according to their specification are neither harmful to health nor cause harmful environmental effects;
- To strive to increase and improve quality standards across products.