By Francesca James
Large supermarkets who deal with suppliers unfairly could be fined by the new Groceries Code Adjudicator, as it is being given greater powers to enforce the Groceries Code, Competition Minister Jo Swinson announced today.
In a change likely to be widely welcomed by suppliers and farmers, the Government listened to the concerns from stakeholders to give the Adjudicator more teeth to protect suppliers from unfair treatment.
If the Adjudicator finds that retailers are breaching the Groceries Code and treating their suppliers unlawfully or unfairly, he or she will be able to apply a range of sanctions. In most cases, this would consist of recommendations or ‘naming and shaming’ but, if the breach is serious enough, the Adjudicator will have an immediate power to fine the retailer.
Jo Swinson said,
“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.
“We expect fines to be used as a last resort, but the fact that the Adjudicator has the power to impose them will send a strong message to retailers that compliance with the Code is not optional. I am confident that these changes will mean that the Adjudicator is able to ensure fair play in the food supply chain and keep the industry growing.”
The Adjudicator will publish guidance within six months after the Bill comes into effect to propose the maximum amount he or she will be able to fine. Retailers would have a full right of appeal against any fines imposed.
The Groceries Code Adjudicator is being established to enforce the Groceries Code after the Competition Commission identified competition issues in their 2008 market study. The Adjudicator will be able to:
arbitrate disputes between retailers and suppliers
investigate confidential complaints from direct and indirect suppliers, whether in the UK or overseas, and from third parties
hold to account retailers who break the rules by ‘naming and shaming’ or, if necessary, imposing a fine
The Adjudicator is being set up through the Groceries Code Adjudicator Bill which is currently passing through Parliament.