BRC slams Competition Commission

The British Retail Consortium (BRC) has slammed the Competition Commission’s (CC’s) proposal to create an ombudsman to settle disputes between retailers and suppliers as pointless and expensive.

As part of its grocery market investigation, the CC published four Proposed Remedies documents in order to address its findings, but the BRC dismissed them as “peripheral”.The ombudsman suggestion was put forward as part of a proposal for a new Groceries Supply Code of Practice (GSCOP), but the BRC said that the existing voluntary supplier code did not need updating and claimed that suppliers were just not using it properly. “Creating new channels for complaint would do nothing but pile on extra costs,” said BRC director general Stephen Robertson. “It’s not clear what need there is for another bureaucratic layer. The voluntary supplier code is a sensible attempt to set down what is and is not permissible behaviour, but suppliers have not made use of it.”

He also claimed supplier bullying was not an issue. “Abuse has not been found because supermarket/supplier relationships are overwhelmingly mutually beneficial and built on trust.”

However, last August, accountancy firm Grant Thornton told Food Manufacture​ that supplier bullying was a problem. “Our direct experience of advising food suppliers, clearly shows that examples of unreasonable behaviour do go on and are putting a huge financial strain on food suppliers,” said Duncan Swift, head of Food & Agribusiness Recovery Group at the firm.

Commenting on the CC’s proposed remedies, Swift said: “The call for an ombudsman is not before time. There needs to be a party involved in the complaints process to define what are “reasonable terms” according to the Supermarket Code of Practice so a breach can be flagged up. That means reasonable in regard to credit terms and reasonable in terms of delisting periods.”

In addition, Swift called for the independent party to be given powers to test food to compare current and previous supplies so a retailer’s grounds for delisting could be assessed fairly.

The CC is currently consulting on its proposals and would like to hear from all interested parties by Friday March 7. To submit evidence, please email: Groceries@cc.gsi.gov.uk