Supermarket adjudicator plans divide industry

By Mike Stones

- Last updated on GMT

Related tags: Critical thinking

Bonus or basket case: opinions differ on the government's plans for a supermarket adjudicator
Bonus or basket case: opinions differ on the government's plans for a supermarket adjudicator
The government’s plans for a supermarket adjudicator continue to divide industry opinion after the publication on October 15 of its response to a report from the Business, Innovation and Skills (BIS) Select Committee.

While the Food and Drink Federation (FDF) broadly welcomed the government’s response, the National Farmers Union (NFU) described it as “inexplicable”,​ and criticised its rejection of calls for tough new powers to reinforce the adjudicator’s role.

Terry Jones, FDF director of communications, said: “The government’s response brings us closer to putting in place a referee to accompany the rule book​ [the Groceries Supply Code of Practice or GSCOP]. This will not only give manufacturers the confidence to innovate and invest but will protect choice and availability for the consumer. In general this is a step forward for trade associations.”

Shifted its stance

The arguments that have been put forward by the FDF led to two select committees recommending the inclusion of trade association evidence and the government has shifted its stance to say that this will be under further consideration, he said.

The proposal also recommends that publicly available information from trade associations can be used as evidence for deciding whether to trigger an investigation, he said. Although Jones regretted that financial penalties would not be available from the outset, he accepted that other sanctions and penalties would be powerful enough.

But the government had dismissed key recommendations that were necessary to ensure the adjudicator is fit for purpose, said the NFU.

NFU president Peter Kendall complained the government had “…chosen to ignore the most significant recommendations of those MPs, rendering the pre-legislative process an irrelevant diversion.

“In particular, the Select Committees endorsed the need for the groceries code adjudicator to be given the power to take credible evidence from a wider range of sources, including representative bodies like the NFU, when deciding to launch an investigation into supermarket practices. This is essential to ensure that the code can be made to work effectively.”

Right direction

Commenting on the appointment of a supermarket adjudicator before the government’s response to the Select Committee, Brian Stein, chief executive of Samworth Brothers, told “I think it’s a step in the right direction. I recognise it’s not as simple as putting an adjudicator in place and everything changes to a different world, but I hope and pray that having the adjudicator in place will stop one or two of the different practices that go on.

“Sometimes retailers can forget just how powerful they are. And they don’t realise until it’s too late sometimes that they have pushed a little bit too far and people have gone out of business.

“And if in a number of years’ time there is a major player that disappears, then the retailers will start panicking. And I just hope that we don’t get to that stage.”

Patrick Coveney, chief executive of Greencore, said the new code was unlikely to “drive an enormous change”.

“I’m not sure you get great returns with excessive regulation. Can guidelines and a code help? Is it going to fundamentally drive a change in the relationship between retailers and suppliers? I don’t think so.”

Related topics: Legal

Related news

Show more