Grocery adjudicator’s success depends on referrals

By Mike Stones

- Last updated on GMT

Related tags Groceries code adjudicator Retailing Supermarket Food and drink federation

The Queen set out the government's plans for a groceries code adjudicator in a speech before both Houses of Parliament
The Queen set out the government's plans for a groceries code adjudicator in a speech before both Houses of Parliament
The success of plans to appoint a groceries code adjudicator ― set out in the Queen’s speech today (May 9) ― will depend upon the adjudicator's ability to listen to third-party referrals and levy penalties, say food and drink manufacturers.

Welcoming the plans for an adjudicator to enforce the Groceries Supply Code of Practice [GSCOP], the Food and Drink Federation (FDF) pledged to lobby for third-party referrals of alleged retailer malpractice. Third-party referrals were essential to avoid the prospect of retaliation against individual food or drink manufacturers, it said.

Terry Jones, FDF director of communications, said: “As the Bill proceeds through both Houses ​[of Parliament], FDF will work to establish trade associations as providers of confidential information on behalf of their members. Small suppliers need to be assured they will not face retaliation from retailers for using the code or speaking out about unfair practices.”

Abuses of market power

Jones added that the measures will address the abuses of market power identified by the Competition Commission. It would give “businesses, especially small- and medium-sized manufacturers, the confidence to innovate and invest which, in turn, secures choice and availability for the consumer”,​ he said.

The new independent adjudicator would ensure supermarkets’ suppliers are “treated fairly and lawfully”,​ according to the speech.

Speaking yesterday, Alex Jackman, senior policy adviser with the Forum of Private Business, said: “Supermarkets nowadays are multi-billion-pound corporate giants driven by money. Frankly, anything less than an adjudicator with the power to take that money from them is simply going to be woefully inadequate.”

Meredith Alexander, head of policy for charity ActionAid, said the adjudicator would  prevent supermarkets from exploiting their suppliers, in the UK and overseas.

“This is fantastic news for millions of farmers and workers around the world who produce goods for British supermarkets,”​ he said.

“Naming and shaming retailers who break the rules will be important, but this needs backing with the threat of heavy fines. We need a watchdog whose bite is worse than its bark,” ​added Alexander.

Mark Driscoll, from the campaign group WWF-UK, said the WWF would like to see the immediate implementation of the groceries code adjudicator to police GSCOP. “We want to make sure that retailers don’t treat producers unfairly and abuse their power by transferring excessive risks or unexpected costs onto their suppliers,” he said.

Red tape

But Stephen Robertson, British Retail Consortium director general, said the appointment of a grocery adjudicator would slow economic growth: “For retail to contribute effectively to economic growth we need the government to show considerably more restraint when it comes to red tape. Sadly, the Queen’s Speech suggests there’s little sign of the leopard changing its spots.”

Robertson added: “Every new demand from government that affects the retail sector adds bureaucracy and costs, and makes it harder for the businesses affected to invest, grow and create jobs. A lot of little pieces of red tape combine to make one big burden.

“The most worrying Bill outlined today is the Groceries Code Adjudicator Bill which duplicates an existing supply code of practice and writes a blank cheque on behalf of the retail sector.”

The Queen’s Speech, delivered today to both Houses of Parliament, set out the government’s plans for the year ahead.



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