Grocery Adjudicator: Powers to Protect Small Suppliers

The Groceries Code was set up in 2010 and now has the Groceries Code Adjudicator behind it with new powers to protect small suppliers.

Following a 2008 investigation by the Competition Commission, big gorcery retailers were found to have delivered good value to customers,but it was often at the expense of the suppliers, many of whom are small businesses.

Jo Swinson, the Competition Minister, said that the Department for Business Innovation & Skills (BIS) will be giving new powers to the Groceries Code Adjudicator to ensure that small suppliers are treated fairly and lawfully.

If the Adjudicator finds that retailers break the code then they have a number of options at their disposal:

As a start, the adjudicator will be able to arbitrate disputes between retailers & suppliers. They can make recommendations to the retailer that breaks the code.

The next level of sanction is to be able to publicly "name & shame" the perpetrator.

If the breach of the code is more serious then the adjudicator has the power to fine the offender.

The Grocery Code Adjudicator has the power to investigate direct and indirect complaints against the 10 retailers to whom the code applies. These retailers each have a turnover of greater than £1 billion.

The Groceries Code Adjudicator Bill is passing through Parliament and the Adjudicator’s guidance will be published within six months.

Jo Swinson commented on the latest developments, saying:

“The food industry plays an important role in economic growth, and the Groceries Code Adjudicator will help to ensure that the market is operating in a fair and healthy way. Large supermarkets form a big chunk of this industry, and generally provide consumers with low prices and variety whilst providing business for farmers and suppliers.”

“But where supermarkets are breaking the rules with suppliers and treating them unfairly, the Adjudicator will make sure that they are held to account. We have heard the views of the stakeholders who were keen to give the Adjudicator a power to fine, and recognise that this change would give the Adjudicator more teeth to enforce the Groceries Code.”

The National Farmers Union (NFU) welcomed the latest powers, with their Head of Government Affairs, Nick von Westnholtz, previously concerned that the bill would only be able to name & shame offenders, saying:

“Now we know that, in cases of a serious breach, the adjudicator can resort to a serious penalty. We are delighted that the government has listened to us and will be amending the Bill accordingly.

“We know from our members that they continue to suffer from unfair treatment by some retailers – so the news that we are now in sight of having an adjudicator up and running, and with the right powers to do their job, hasn’t come a moment too soon.”

The British Retail Consortium (BRC) however, were not so happy with the news with Director General, Stephen Robertson, echoing the sentiments of some of the bugger retailers, those to whom the Code applies directly. Stephenson called the measures "heavy handed" and added:

“The Code already has a provision for ‘naming and shaming’ retailers – that’s a significant sanction and a much fairer system which would deliver better for suppliers, retailers and consumers. This flies in the face of common sense and is yet another piece of disproportionate legislation aimed at food retailers. It’s a major let-down and makes it even more important that retailers are given a full right of appeal against being fined or ‘named and shamed.”

Retailers will have the right to appeal against fines imposed by the new Grocery Codes Adjudicator.

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