GCA Levy funding policy 2018/19
Published 16 July 2018
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How the Groceries Code Adjudicator (GCA) has determined the levy on retailers for the financial year 2018/19.
This fulfils the requirement of section 19(8) of the Groceries Code Adjudicator Act 2013.
1. Levy amount for 2018/19
The levy amount for 2018/19 was set at £2 million. This was the same amount as 2017/18.
The total levy contributions required to be paid by retailers range from 6.7% to 20.1% of the total levy amount.
2. Levy methodology
As in 2017/18, the GCA charged the regulated retailers a variable percentage of the levy. In line with section 19 of the Groceries Code Adjudicator Act 2013, this variable percentage was based on criteria broadly intended to reflect the expense and time that the Adjudicator expects, in light of previous experience, to spend in dealing with matters relating to different retailers.
- 60% of the levy is split in equal shares between each retailer;
- 20% of the levy is split in different shares per retailer based on a methodology which reflects the complexity and size of the retailer’s business and impact on GCA time, by taking into account both groceries market share and the prevalence within the business of practices falling within the GCA’s Top issues, whether current or monitored; and
- 20% of the levy is split in different shares between those retailers that have had an investigation in the last financial year together with ongoing compliance and monitoring in the year ahead or an open investigation running into the year ahead, a case study published or a chargeable arbitration conducted in the last financial year. Designation of new retailers
There is the potential, following the outcome of the call for evidence on GCA remit extension, that more retailers will be designated under the Groceries (Supply Chain Practices) Market Investigation Order 2009. At present, it is unclear when any additional retailers might become subject to regulation by the GCA. There is no provision in the GCA Act or otherwise for the GCA to make mid-year adjustments to its budget or to increase or decrease the levy. Moreover, it would not be feasible in the initial period of any new retailer coming under the Code, either to apply the variable levy methodology as the GCA would not have the information in order to apply the variable levy assessment criteria, or to assess what GCA time and resources that retailer might require.
In light of this, the GCA Executive Board agreed that for the first year or part year following designation taking effect, any new retailer will be charged a flat-rate levy payment of £200,000 pro-rated to reflect the portion of that GCA financial year remaining. New retailer contributions will be applied against the existing GCA budget of £2 million, and year-end rebates to the existing ten designated retailers will be adjusted accordingly at the end of the financial year.