Groceries Code Adjudicator With Bite
by Baron Halpenny, LincsMag Editor.
Date: 04 December 2012
A new watchdog, under changes announced by the Department for Business, could fine the 10 biggest supermarket chains that mistreat their suppliers.
Ministers have bowed to pressure from MPs, food suppliers and groups lobbying on behalf of farmers, such as the CLA, to toughen up the new Groceries Code Adjudicator (GCA), which was introduced in 2008 following a Competition Commission report into the relationship between supermarkets and their suppliers.
The groceries adjudicator will rule on disputes between retailers and suppliers and will not only be able to name and shame offenders but also impose fines.
Held To Account
"Where supermarkets are breaking the rules with suppliers and treating them unfairly, the adjudicator will make sure that they are held to account," said Competition Minister Jo Swinson.
"We have heard the views of the stakeholders who were keen to give the adjudicator a power to fine, and recognise that this change would give the adjudicator more teeth to enforce the Groceries Code."
"We expect fines to be used as a last resort, but the fact that the adjudicator has the power to impose them will send a strong message to retailers that compliance with the code is not optional," she added.
The CLA welcomed confirmation that the new Groceries Code Adjudicator will be given the power to fine supermarkets for treating suppliers unfairly.
In response to campaigning by the CLA and its industry partners on the issue, the Association said the announcement by Competition Minister Jo Swinson meant farmers and other producers should be able to rely on a supermarket ombudsman with “bite” to enforce the Groceries Code.
Ensure Fair Treatment
However, CLA East director Nicola Currie sounded a note of caution.
She said: “Under today’s announcement, fines will only be imposed on supermarkets as a ‘last resort’ and large retailers will be permitted to appeal against fines which would then lead to protracted legal battles.
“Giving the Adjudicator powers to impose financial penalties on large retailers without having to go through the Secretary of State for approval is an extremely welcome move. Now it is up to Adjudicator to ensure this works in practice and the supermarkets do not ride roughshod over the new system.”
She added: “Supermarkets have got away with unfairly treating suppliers for too long. An ombudsman with bite is really needed to boost economic growth and ensure fair treatment for farmers.”
The maximum fine is to be set based on recommendations from the first adjudicator once they have been appointed.
The Groceries Code Adjudicator Bill is currently passing through Parliament.
