Government gives green light for ombudsman

The Food and Drink Federation (FDF) has welcomed the government’s go-ahead for a supermarket ombudsman, saying it would particularly help smaller businesses.

Responding to consumer minister Kevin Brennan’s announcement that he accepted the Competition Commission’s recommendation to create a group to police the Grocery Supply Code of Practice (GSCOP), FDF director general Melanie Leech said: “We support the government’s decision, which we believe will be of particular help for smaller businesses in the food chain.

“We look forward to working with the government to ensure this new organisation operates as an effective, low cost monitoring and enforcement body.”

Dr Tom MacMillan, executive director of the Food Ethics Council, also ensdorsed the move, saying: “It has long been apparent that the power wielded by supermarkets needs to be regulated. The government must now ensure that it listens to small producers as well as big business while it consults on what shape an enforcement body should take.
“A strong supermarket ombudsman, invested with real power, would have the authority to ensure fair prices from the farm gate to the checkout. It would protect the livelihoods of farmers across the UK and give consumers better access to fresh, healthy food.”
However, Stephen Robertson, director of the British Retail Consortium reacted angrily to the news, saying: “This would tip the balance of negotiating power in favour of multi-national food manufacturers allowing them to drive up the prices consumers pay.
“If threats of involving an ombudsman allow big food companies to squeeze even 0.1% more out of supermarkets, that’s £130M extra on customers’ bills.
“It’s disappointing that the government has decided to pursue this despite the lack of evidence that it is needed. There is already a supplier code, overseen by the Office of Fair Trading and offering the right to independent arbitration. It has long been compulsory for the ‘big four’ supermarkets and is being extended to more retailers next month.”
The GSCOP comes into force on February 4. Brennan said: “Free and fair competition is the key to a healthy market and it is right that there should be an enforcement body to make sure that consumers are getting the best value for money.
“We do not anticipate a significant impact on consumer prices or workers resulting from the creation of an enforcement body. The next step is to consult formally on its nature and role, to ensure that all interested parties can make their views heard and that informed decisions are made.”