Oxford farming conference

Trade bodies ‘should play bigger role’ on supplier abuses: DEFRA

12-Jan-2015 - Last updated on 12-Jan-2015 at 11:58 GMT

Environment secretary Liz Truss said trade bodies should play a bigger role in exposing abuse of suppliers

Related tags Groceries code adjudicator Grocery store Gca

Food industry trade associations should play a bigger role in helping to expose the abuses suffered by suppliers at the hands of supermarkets and other customers, said environment secretary Liz Truss at the Oxford Farming Conference this week.

Acknowledging the reluctance of suppliers to highlight cases of abuse for fear of retribution, Truss told FoodManufacture.co.uk: “What we need is to see more people coming forward and that could be trade organisations rather than individual farmers or producers and that’s what I want to see happening.”

Questioned about a conspiracy of fear allegedly preventing some suppliers identifying examples of abuse, Truss replied: “That’s why I’m saying trade associations can play a role in putting those cases forward.”

But the minister did not see any need to strengthen or change the powers of the Groceries Code Adjudicator (GCA). “We should work through the system as we’ve got at the moment, so we can see does it have the necessary and desired effect,” she said at the farming conference on Wednesday January 7.

Trade associations and other manufacturers’ representatives told FoodManufacture.co.uk they were continuing to supply the GCA with information.

‘Unexpected costs’

Food and Drink Federation (FDF) interim director general Jim Moseley said that grocery suppliers mostly enjoyed productive and profitable trading relationships with their retail customers. “However, should our members raise cases where excessive risk and unexpected costs are passed down from retailers to suppliers, then FDF will bring these to the attention of the Groceries Code Adjudicator, providing the member is happy for us to do so.”

In addition, the FDF would continue to run events highlighting the work of the GCA and has enabled the GCA to present to its membership, he added.

The Federation of Small Businesses (FSB) policy chairman Mike Cherry said: “All businesses should feel empowered, regardless of their size, to do business on a fair basis and to represent themselves without fear of retribution from customers. Where rules and processes provide insufficient protection, they should be strengthened to enable businesses to raise their concerns and have them acted upon.”

The FSB had a strong record of bringing market abuses and poor business practices to light, he added. “We also have a long history of informing government, regulators, and industries on the areas that need to be addressed. We will continue to do so in defence of our members and the wider small business sector.”

Provision Trade Federation director general Terry Jones acknowledged the role trade associations could play a key role in informing the GCA but said the case for enhanced powers or code extension was less clear.

‘Twin remedies’

“The twin remedies of the GSCOP [Grocery Supply Code of Practice] and the GCA were established to address an adverse effect on competition identified by the Competition Commission during its long-running investigation into the grocery market. They are designed to protect consumers’ interests by ensuring that excessive risk and unexpected costs aren’t transferred to suppliers which in turn could lead to a reduction in choice and availability.

“While the GCA is working successfully to deliver against this agenda, suggesting changes to the Code or to the adjudicator’s mission seems a little premature.”

A spokeswoman for Christine Tacon, the GCA, said the adjudicator did not comment on whether her remit should be extended because that would be a matter for Parliament. She added: “Christine Tacon has been working closely with key trade bodies and is extremely keen to encourage them to gather information from their members about potential breaches of the code.”

Key bodies have been invited to a meeting with the GCA in the near future to discuss how this work could be advanced, she disclosed. “The GCA has a duty to protect supplier anonymity and approaches issues in a way to assure such protection but she also recognises that individual suppliers may also have greater reassurance that their identities will be protected if the information is brought to the GCA through a third party,” said the spokeswoman.

Food manufacturing giants Premier Foods and the 2 Sisters Food Group hit the headline last month after some suppliers complained of unfair practices.