Groceries Code of Practice to be strengthened

In a report released today by the Commons Business, Innovation and Skills Committee, it calls for the powers to fine to be made clear on the face of the Groceries Code of Practice Bill, and also to allow indirect suppliers such as farmers and trade associations – and whistleblowers – to be able to give evidence that could spark and investigation by the adjudicator.

Chair of the Committee Adrian Bailey MP said a Code of Practice has protected suppliers since 2001 but in 2008 the Competition Commission recommended a new Groceries Code to improve on it, and part of that was to introduce an adjudicator. He said: “When a voluntary agreement to implement the proposal failed to materialise, the Commission requested legislative action.”

He said the government recognises the need for an adjudicator but also “there is evidence too of continuing difficulties, and of reluctance by suppliers to invoke their rights under the Code”. He said the adjuducator will protect suppliers by allowing them to give evidence anonymously.

He also said the Bill should be widened, to allow trade associations to give evidence, and for whistleblowers to also give evidence.

“We also heard strong arguments that indirect suppliers to large retailers such as farmers should have be given a voice, and we therefore agree with the government that they should be able to draw attention to potential code breaches despite not being covered by the code,” he said.

He said the Committee disagreed with the government regarding fines, and proposes that fines be an available penalty from the start.

He said costs should be kept to a minimum though, and the government should move ahead with legislation as soon as possible.

The British Retail Consortium said it was disappointed the Committe had not rejected allowing anonymous and third-party complaints, but said it is right to recognise the need for strict and robust guidance.

BRC Food Director Andrew Opie said: “We have always said it’s in supermarkets’ own interests to have good long-term relationships with their suppliers and an adjudicator is not necessary. But, if the government is set on introducing one, it must keep the regulatory burden and related costs down, to avoid higher shop prices for customers.

“The Committee is right to call for a high level of evidence before the Adjudicator launches an investigation and to say it should only respond to complaints, not go on fishing trips.”