Labour's bid to fine abusive supermarkets fails

01-Aug-2012 - Last updated on 02-Aug-2012 at 08:46 GMT

Related tags Groceries code adjudicator House of lords

Creagh: 'We would like to see the power to fine supermarkets for breach of the Code'

Labour’s attempts to enable fines to be imposed on supermarkets that abuse their power have failed.

Opposition peers proposed the changes as an amendment to the Groceries Code Adjudicator (GCA) Bill during the Bill's report stage in the House of Lords last month.

Two-year delay

Shadow environment secretary Mary Creagh welcomed the government's decision to introduce an adjudicator to police the Groceries Supply Code of Practice (GSCOP), which came in under Labour in February 2010. However, she expressed disappointment at the "two-year delay" in appointing an adjudicator.

"We would like to see the power to fine supermarkets for breach of the Code on the face of the bill," said Creagh. "At the moment it would need to be enacted under secondary legislation. And we think people shouldn't have to wait another six months or a year for that to happen."

Peers completed consideration of the GCA Bill at report stage on July 16. Labour had proposed an amendment regarding the powers of the adjudicator who, under the bill, would be able to name and shame offenders if a retailer was found to have breached the code, and might have the power to impose fines in the future.

Peers reject Labour amendment

Labour called for the adjudicator to have powers to impose fines as soon as the post was established. Labour peer Lord Whitty said "naming and shaming is not enough". However, peers rejected the amendment by 217 votes to 186 a government majority of 31.

Farmers and smaller food and drink manufacturers remain concerned about the imbalance in power between the four major supermarkets and their suppliers. They want an adjudicator in place as soon as possible to stop the multiples from abusing their power.

Had an adjudicator been in place, it might have made Morrisons think twice about trying to get 200300 of its suppliers to absorb up to £500,000 cuts each in the price of their contracts last month (see p11).

A number of suppliers, speaking anonymously to Food Manufacture, spoke of the unusually "aggressive" tactics Morrisons had adopted in demanding cuts to prices that had already been agreed.

"We welcomed the fact that the government will now allow third-party organisations to refer to [the adjudicator]," said Craigh. "That is progress."

Look out for the Big Interview with Mary Creagh in the September issue of Food Manufacture magazine.