The UK retail industry has hit out at Government plans to introduce an independent adjudicator to ensure supermarkets deal “fairly” and “lawfully” with suppliers.
In the Queen’s speech in Parliament this morning (9 May), plans were announced to establish a Groceries Code Adjudicator.
“My Government will introduce legislation to establish an independent adjudicator to ensure supermarkets deal fairly and lawfully with suppliers,” the Queen said as she laid out the Government’s intentions for the coming year.
The adjudicator will be appointed to oversee the implementation of the Grocery Supply Chain Code of Practice (GSCOP), which was introduced in 2010 to address a perceived imbalance of power between retail multiples and their suppliers. The introduction on the GSCOP followed an extensive investigation from the Competition Commission. However, the plans have proven a divisive issue for the UK food industry.
In reaction to today’s announcement, British Retail Consortium (BRC) director general Stephen Robertson said: “Every new demand from Government which affects the retail sector adds bureaucracy and costs, and makes it harder for the businesses affected to invest, grow and create jobs.
“A lot of little pieces of red tape combine to make one big burden. The most worrying Bill outlined today is the Groceries Code Adjudicator which duplicates an existing supply code of practice and writes a blank cheque on behalf of the retail sector. “
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BRC food director,Andrew Opie added that it is in retailers’ own interests to have “excellent relationships” with their suppliers.
“They depend on a successful and resilient supply chain to keep their shelves stocked with the produce consumers want to buy. The UK already has the most regulated supply chain in the world, giving legal protection for suppliers to the biggest retailers through the Groceries Supply Code of Practice, which includes the right to independent arbitration,” he claimed.
Organisations representing farmers and food suppliers, however, have widely welcomed the move, insisting that without enforcement powers the GSCOP would lack the muscle necessary to ensure fair-dealing down the supply chain.
The UK’s Food & Drink Federation (FDF) director of communications Terry Jones said the industry body was pleased the legislation will go forward.
“Together these measures will address the abuses of market power identified by the Competition Commission giving businesses, especially small and medium sized manufacturers, the confidence to innovate and invest which in turn secures choice and availability for the consumer.
“Small suppliers need to be assured that they will not face retaliation from retailers for using the Code or speaking out about unfair practices,” he said.
Mark Driscoll, One Planet Food Lead at WWF-UK, said the organisation would like to see the “immediate implementation” of an adjudicator that will “stamp out abuses in supply chain power”.
“We want to make sure that retailers don’t treat producers unfairly and abuse their power by transferring excessive risks or unexpected costs onto their suppliers,” Driscoll said.
“These sorts of pressures are bad for producers, bad for consumers and ultimately bad for the environment as they can lead to lower quality goods, higher costs for consumers and lower returns for farmers who need to make investment in more sustainable farming technologies.”
Click here to view the full speech.