A revised code of conduct for British supermarket chains was released without ceremony yesterday by the government, but it has received widely differing responses from the retail sector, British farmers and food suppliers, whose trade relationships it is designed to formalise.
The trade and industry secretary, Patricia Hewitt, introduced the new code with the promise that it would create a better balance between the supermarkets and their suppliers. The likes of powerful sector giants Tesco and Sainsbury’s have often been accused of bullyboy tactics in squeezing the margins of suppliers, although the chains were largely exonerated by a Competition Commission inquiry.
Based on the inquiry’s recommendations, the code was welcomed by the leading supermarket groups and Michael Hutchings, a competition lawyer advising several suppliers, is cited in the Financial Times as expressing a positive long term for the code in practice: “I think that when the dust has settled the fact that a code has been put in place and is signed up to by the big supermarkets will be regarded as a good result for everyone.”
Similarly, the Food and Drink Federation, which represents the food and drink manufacturing sector in the UK, said in a press release that it “is very pleased that this Code has been finally published. We are surprised it took so long!”
“We shall study the Code in great detail to see the degree to which our concerns which we relayed to the OFT have been taken on board.
“At first sight it does not look dramatically different from previous drafts, although we welcome the clarification of the role of mediator.
“However, the acid test will be how the Code actually operates. We shall be actively monitoring this.”
Farmers and suppliers reacted more angrily last night however, arguing that the code had not changed sufficiently from its original form.
Adrian Bebb, from the environmental pressure group Friends of the Earth, said: “This watery code of practice has been sneaked out in the usual New Labour fashion because it is a surrender to big retailers and their lobbyists and a sell-out of the needs of their suppliers.”
President of the National Farmers’ Union, Ben Gill, maintained meanwhile that the new code was bound to leave farmers and growers “bitter and angry”, at the mercy of the discretion of the major retail chains.