The UK government has given the go-ahead for the creation of an ombudsman to protect suppliers from abuses of power by the country’s leading food retailers.
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Consumer minister Kevin Brennan announced today (13 January) that he had accepted the Competition Commission’s recommendation for a body to enforce the Groceries Supply Code of Practice.
The code comes into force on 4 February and will be followed by a consultation on how best to enforce the regulations, including what form the ombudsman would take and what powers it would have.
Brennan said the code is a “great improvement” on the current regime.
However, he added: “The power that large grocery retailers remain able to wield over their suppliers can still create pressures on small producers, especially in these difficult economic times, which ultimately may impact on consumers.
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By GlobalData“Free and fair competition is the key to a healthy market and it is right that there should be an enforcement body to make sure that consumers are getting the best value for money.”
Brennan said the Government does not anticipate a “significant impact” on consumer prices or workers resulting from the creation of an enforcement body.
“It is not a question of whether a body is needed, but exactly how that body will operate. The next step is to consult formally on its nature and role, to ensure that all interested parties can make their views heard and that informed decisions are made,” he added.
Retailers have warned that the creation of a supermarket watchdog could drive up prices for consumers through unnecessary red-tape.
Farming bodies, however, have called for the creation of an ombudsman and supported last week’s announcement from the Conservative Party that it would set up a watchdog should it take office this summer.
Environment Secretary Hilary Benn said the new ombudsman will help “strike the right balance” between farmers and food producers getting and fair deal, and supermarkets enabling consumers to get the “high quality British food that they want, at an affordable price”.
