The establishment of the new body will oversee the implementation of the Groceries Supply Code of Practice to ensure a level playing field between the largest companies in the market and small and medium-sized enterprises, in a move to oversee the whole supply chain.
This Bill will create a Groceries Code Adjudicator (GCA) to uphold the Groceries Code. It will address the market dominance of the large retailers and ensure suppliers are treated fairly and lawfully.
The GCA would address these competition issues by arbitrating disputes between retailers and suppliers, investigating anonymous complaints, and taking sanctions against retailers who break the rules. It is expected that both Bills will receive an early introduction.
Melanie Leech, director general at the Food and Drink Federation (FDF) said that the move will enable third parties such as itself to submit evidence of Groceries Supply Code of Practice (GSCOP) transgressions.
“The Competition Commission findings were clear that unless the abuse of market power is addressed then businesses especially small and medium-sized manufacturers will be less inclined to innovate and invest,” she said.
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 by boosting levels of competitiveness and stopping monopolies gained by those that secure sole supplier supermarket deals.
Terry Jones, head of communications at FDF, commented: “Small suppliers need to be assured that they will not face retaliation from retailers for using the Code or speaking out about unfair practices.”
There was a mixed reaction to the announcement with a spokesperson for the National Farmers Union saying that the enforcement powers are not strong enough while British Retail Consortium denied that the legislation even needed to be implemented.
British Retail Consortium’s director general Stephen Robertson, said that the move is simply another layer of red tape which was unnecessary after retailers negotiated a string of responsibility deals in 2011. “For retail to contribute effectively to economic growth we need the Government to show considerably more restraint when it comes to red tape,” he said. “Sadly the Queen’s Speech suggests there’s little sign of the leopard changing its spots.”
“Every new demand from Government adds bureaucracy and costs, making it harder for businesses affected to invest, grow and create jobs. The Groceries Code Adjudicator duplicates an existing supply code of practice and writes a blank cheque on behalf of the retail sector.”
On the other side of the fence NFU President Peter Kendall said it was vital that the Adjudicator has the power to ‘take credible evidence from reputable sources, and to use its judgment to assess its worth, before launching an investigation.’