Member Article

Groceries Adjudicator to bring fairness to retail

The Bill detailing plans to set up the new Groceries Code Adjudicator was published in the House of Lords today.

The new body will enforce the Groceries Code after the Competition Commission identified competition issues in their 2008 market study, concluding that market dominance of big supermarkets led to some suppliers receiving unfair treatment in the UK and overseas.

An Adjudicator would arbitrate disputes between retailers and suppliers; investigate confidential complaints from direct and indirect suppliers, whether in the UK or overseas, and from third parties, to end the ‘climate of fear’; and hold to account retailers who break the rules by ‘naming and shaming’, or fining, where necessary.

Business Minister Norman Lamb said: “The large supermarkets have a lot of buyer power, and with power come responsibilities.

“Supermarkets will still be able to secure the best deals and to pass the benefits on to consumers, but they should also treat farmers and suppliers fairly and lawfully.

“This means paying them on time or not being able to scrap arrangements with farmers and suppliers at the drop of a hat.

“Free and fair competition is the key to a healthy market and by preventing retailers from transferring excessive risk to their suppliers we will support investment and innovation in the supply chain. In the long-term, that’s in the best interests of everyone, especially the consumer.

“I have also responded to concerns from the Select Committee and others that trade associations should be able to complain to the Adjudicator and have amended the draft Bill to provide for this.”

The Government claim that in such a highly competitive market, particularly the ability to ‘name and shame’ supermarkets, is like to have a strong deterrent effect.

Agriculture Minister Jim Paice said: “The Grocery Code Adjudicator will ensure fair play in the food supply chain to make all terms fair and balanced.

“The food industry is vital to our economy and this Government is committed to ensuring that all sectors of it are able to thrive while providing the best value and quality for consumers.”

Food and Drink Federation Director General Melanie Leech, said: “We need an effective Groceries Code Adjudicator to enforce the Groceries Supply Code of Practice and ensure suppliers have the confidence to come forward directly or through their trade associations.

“We believe an Adjudicator will help to ensure that the food chain operates fairly and in the best interests of consumers in terms of choice and availability.”

This was posted in Bdaily's Members' News section by Tom Keighley .