Government moves closer to setting up grocery ‘ombudsman’

The GCA will reside within the Office of Fair Trading (OFT) and will monitor and enforce the Groceries Supply Code of Practice (GSCOP). The Government wants to introduce a draft bill later this year.

The GCA will receive complaints about the way supermarkets interact with their primary suppliers from anyone in the supply chain at home or overseas, and deal with them anonymously. This includes farmers who may not directly supply the large supermarkets.

Non-governmental organisations, trade associations and other organisations cannot lodge complaints directly, but the Department for Business, Innovation and Skills said they will play a useful role in offering advice and assistance.

Consumer Minister Edward Davey said: “We want to make sure that large retailers can’t abuse their power by transferring excessive risks or unexpected costs onto their suppliers. These sorts of pressures are bad for producers and bad for consumers – ultimately they can lead to lower quality goods, less choice and less innovation.

“The Adjudicator will be able to step in to prevent unfair practices continuing – ensuring a fair deal for producers and safeguarding the consumer interest.”

The British Retail Consortium has hit out against the GCA. It said it should not create a GCA until the impact of the GSCOP – introduced in February – has been assessed. It said the new quango is unjustified and against the spirit of better regulation.

BRC director general Stephen Robertson said: “An ‘adjudicator’ will just add unnecessary costs. We fail to see why principles of better regulation don’t apply to grocery retailing, particularly when the additional costs will ultimately affect the prices customers pay.

“The existing code of practice was strengthened and extended as recently as February. It now applies to all the top ten biggest grocery retailers. It gives suppliers more protection and a new right to independent arbitration to resolve disputes. Its effectiveness over several years should be assessed before any decision to introduce further regulation.

“We already have the most regulated grocery sector in the world. The Code the ‘adjudicator’ would administer only applies to suppliers who have a contractual relationship with retailers but there’s a real danger the new body will generate lots of correspondence from suppliers who aren’t covered. Administering those will still clock up costs.”