The UK government announced today (4 December) that the newly-created grocery Adjudicator will have the power to fine large supermarkets who breach the Grocery Code of Practice. Unsurprisingly, the issue has divided the industry. Organisations representing smaller suppliers have applauded the news and suggested it will ensure the watchdog is “fit for purpose”. Meanwhile, retailers have insisted the move will impose an unnecessary level of bureaucracy and represents a “disproportionate” and “heavy handed” response from the UK government.
“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” – UK competition minister Jo Swinson
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“The Government has given thousands of small suppliers an early Christmas present with this announcement. We have always supported the concept of the Groceries Code Adjudicator, but said it would be seriously undermined without the power to fine, a tool without which would have rendered a body like this unfit for purpose from the outset. Supermarkets understand one thing, and one thing only, and that’s money. So it’s just common sense for the Adjudicator to be able to wield this kind of weapon as a measure of last resort in the worst cases of supermarket malpractice” – Alex Jackman, head of policy at The Forum of Private Business.
“Under today’s announcement, fines will only be imposed on supermarkets as a ‘last resort’ and large retailers will be permitted to appeal against fines which would then lead to protracted legal battles. Giving the Adjudicator powers to impose financial penalties on large retailers without having to go through the Secretary of State for approval is an extremely welcome move. Now it is up to Adjudicator to ensure this works in practice and the supermarkets do not ride roughshod over the new system” – Country Land and Business Association president Harry Cotterell
“We welcome the government’s announcement today that its supermarket watchdog will have the power to impose fines for bullying suppliers. This breakthrough has only come through dedicated campaigning, with members of the public across the country pushing MPs for action to curb supermarkets’ excessive power. It is a great step towards securing fair treatment for workers around the world who pick, pack and grow our food” – Murray Worthy, supermarkets campaigner for the anti-poverty charity War on Want
“We are very disappointed that the Government has suddenly chosen to propose fines when we believe that naming and shaming retailers would have provided plenty of incentive to comply with the code. It’s an unwelcome change of course and potentially places another regulatory burden on businesses and this from a Government that says it is committed to reducing red tape” – Morrisons.
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“We’re pointing our contacts in the direction of the BRC on this one” – an Asda spokesperson.
“We’ve been supportive of the introduction of an adjudicator from the outset. However, could we refer to you to the BRC for their statement on fines?” – a Waitrose spokesperson.
“We’ve long maintained that the power to impose fines is unnecessary and heavy-handed and should be kept in reserve. 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'” – British Retail Consortium Director General Stephen Robertson
