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Mixed Reactions to Go–ahead for Grocery Adjudicator

10 May 2012, at 12:11pm

UK - The announcement in the Queen’s Speech on 9 May, that the Groceries Code Adjudicator Bill is likely to be introduced shortly, has been met with mixed reactions.

Reacting to the Speech, British Retail Consortium Food Director, Andrew Opie, said: "It's in retailers' own interests to have excellent relationships with their suppliers. They depend on a successful and resilient supply chain to keep their shelves stocked with the produce consumers want to buy. The UK already has the most regulated supply chain in the world, giving legal protection for suppliers to the biggest retailers through the Groceries Supply Code of Practice, which includes the right to independent arbitration.

"The proposed adjudicator is in danger of adding to the cost and bureaucracy of running a grocery business without adding to the strong protection which already exists for suppliers. The Government's initial estimate put running costs at just £1million a year, a figure the BIS select committee said was unrealistic. The truth is no-one knows what the cost might be. Retailers are being asked to write a blank cheque.

"The Government's priority as it pushes ahead with this Bill should be to keep it as simple and fair as possible, in the interests of customers and all companies involved. The adjudicator should only be able to pursue specific complaints from suppliers which have direct relationships with the retailers, and which are related to the Groceries Code. Allowing third party complaints would open retailers up to malicious campaigns and fishing expeditions from those without full knowledge of the agreements involved, at a great cost to all parts of the grocery supply chain," Mr Opie concluded.

Liberal Democrat MP for West Cornwall and the Isles of Scilly Constituency of St Ives, Andrew George, welcomed the announcement. Mr George has been leading a campaign to protect farmers and growers from retailers for a decade whilst chairing the Grocery Market Action Group (GMAG).

Mr George commented: “The progress of this long campaign has been met with constant opposition from some of the large supermarkets but I think they should embrace this move – if they have nothing to hide then they will have nothing to fear."

The National Farmers Union (NFU) stated that the adjudicator comes as a relief for farmers.

NFU President Peter Kendall said: “We hope the government will confirm its commitment to levelling the playing field in the grocery supply chain by introducing the Bill early in the new session, which starts today. The overwhelming support the Bill already has in Parliament should ensure its swift passage and perhaps we will have an Adjudicator up-and-running before the third anniversary of the GSCOP in early 2013."

“However, we remain concerned that government plans to include complicated and unnecessary provisions in the Bill will fetter the Adjudicator’s ability to investigate unfair practices by the major supermarkets."

“I recognise that some supermarkets are taking positive steps to work constructively with their suppliers and to invest in the long-term health of British farming. But retailers are too inclined to undo this good work by focusing on their own short-term financial performance and this all too often means abusing their position."

The Queen's announcement was also welcomed by charities and campaign groups.

Meredith Alexander, Head of Policy for ActionAid said: “This is fantastic news for millions of farmers and workers around the world who produce goods for British supermarkets, and for the tens of thousands of people who have supported ActionAid’s adjudicator campaign over the past five years.”

“The government must ensure the bill is passed early on in the new session of parliament, as every day’s delay is an extra day’s pain for farmers and suppliers.”

But Ms Alexander warned that unless the adjudicator is able to impose fines, it would not be able to face down big supermarkets: “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.”

The Groceries Code Adjudicator Bill will create a Groceries Code Adjudicator (GCA) who will regulate the dominance of large retailers, making sure that suppliers are treated fairly and lawfully. The GCA will investigate and resolve disputes between retailers and suppliers, giving sanctions to those who break the rules.