UK supermarkets to get watchdog

16-08-2010 | UK Farmers Guardian

The British government has announced ground-breaking plans to create a supermarket watchdog to investigate and solve supply disputes between farmers and Britain's 10 biggest supermarkets.

British farmers will be able to approach the Groceries Code Adjudicator (GCA) _ the new name for an ombudsman _ to complain about any unfair treatment from Tesco, Asda, Sainsbury's, Morrisons, Waitrose, Marks & Spencer, Aldi, Lidl, Iceland and the Co-operative Group.

The complainant_s identity will remain anonymous to avoid reprisals from buyers and any supermarket deemed to be abusing its position of power will be "named and shamed".

If that does not discourage supermarkets from "disreputable behaviour", Ministers may reserve the right to fine serious offenders.

The GCA is not likely to take office until 2012, but the move is seen as a huge boost to farmers who have long called for a watchdog to report bullying tactics such as "golden hello" payment demands or retrospective changes to contracts.

Peter Kendall, NFU president, said it was a crucial step to fix the UK's £110 billion grocery market.

"Once in place, I do believe we will see fewer instances of flagrant bully-boy tactics used by supermarkets over the years and reported to us by our members."

However, the announcement has been branded a backward step by the big supermarkets who argue the £1.2 million-a-year watchdog, which will be funded by the retailers, will be no more than a costly and time-wasting government "quango".

A Sainsbury's spokesman said: "We do not see the need for a Grocery Code Adjudicator."

The adjudicator's job will be to police the Groceries Supply Code of Practice (GSCoP) which has been in place since February this year.

Edward Davey, the Consumer Minister, said: "We want to make sure that large retailers can_t abuse their power by transferring risks or unexpected costs on to their suppliers. These sorts of pressures are bad for producers and bad for consumers."

A supermarket ombudsman was recommended by the Competition Commission in 2008, and Jim Paice, Farm Minister, made it his key pledge in the run-up to the election.

The Department of Business must now win approval from the Parliamentary Business and Legislation Committee to publish a draft Bill later this year with a likely introduction to Parliament in late 2011 and implementation of the watchdog in 2012.

However, some industry figures criticised the government for "a cumbersome approach" arguing the watchdog should be installed "without delay".

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