Britain’s big supermarket retailers have hit out at the Government’s decision to set up a grocery ombudsman to enforce the code of practice for the food supply chain due to come into force on February 4.
Consumer minister Kevin Brennan today gave the go-ahead for a “supermarket enforcer” after accepting recommendations from the Competition Commission.
He said: “The revised Grocery Supply Code of Practice (GSCOP) is a great improvement on the current regime.
“However, the power that large grocery retailers remain able to wield over their suppliers can still create pressures on small producers, especially in these difficult economic times, which ultimately may impact on consumers.
“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.
“It is not a question of whether a body is needed, but exactly how that body will operate.
“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.”
Environment Secretary Hilary Benn said: “The new ombudsman will help strike the right balance between farmers and food producers getting a fair deal, and supermarkets enabling consumers to get the high quality British food that they want, at an affordable price.”
British Retail Consortium (BRC) director general Stephen Robertson has slammed the proposals.
He said: “This would tip the balance of negotiating power in favour of multi-national food manufacturers allowing them to drive up the prices customers pay.
“This is not about farmers, very few deal directly with supermarkets, and it’s not about a ‘mere’ £5m pounds of extra costs.
“The UK grocery market is worth £130bn a year. 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 (OFT) 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.
Farmers, however, have welcomed the move.
National Farmers’ Union (NFU) president Peter Kendall said the decision was the result of hard work and lobbying by the NFU over the past 10 years including in-depth responses to both Competition Commission investigations.
“We’ve worked incredibly hard to make this a reality.
“Although the consultation period means that farmers and growers will still have to wait for the introduction of an ombudsman, we can at last see light at the end of the tunnel.
“It is vital that when the new strengthened code comes into force we have a proactive and robust enforcement mechanism in place as soon as possible.
“This current investigation into the grocery market began in 2006.
“Ministers have taken the right decision and 2010 must be the year we begin to eradicate unfair dealing and protect investment and innovation in British agriculture for the benefit of consumers.”
