By Jason Theodorou

Supermarket suppliers will now be able to complain to a government adjudicator about their treatment by large grocery chains, under plans set to be announced by the government.

The Groceries Code Adjudicator (GCA) will be housed within the Office of Fair Trading (OFT), but will act independently. The decision to appoint an adjudicator comes after months of campaigning by supermarket chains against the introduction of a ruling body.

One executive of a large grocery chain said that the industry had been preparing for a degree of regulatory scrutiny. While the independent adjudicator will have power to mediate in conflicts between supermarkets and their suppliers, the exact powers which they will have to address conflicts have not yet been outlined.

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'.

The government hopes to set up the GCA within the coming 18 months to two years, according to the Department for Business, Innovation and Skills. Sir Terry Leahy, chief executive of Tesco, said this year that suppliers would benefit more than consumers from the introduction of a watchdog.

Stephen Robertson, director general of the British Retail Consortium, said: 'An adjudicator will just add unnecessary costs... with an independent budget, and no direct reporting line to the OFT or government, this is a quango. Quango's cost. This will reduce the efficiency of the supply chain and customers will pay the price'.

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