The UK’s Competition Commission has asked the Government to set up an ombudsman to oversee the relationship between suppliers and retailers.
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The move follows the Commission’s investigation into competition in the UK grocery market.
The Commission said it was necessary to establish an independent body to ensure that retailers and their suppliers observe a new strengthened code of practice.
However, the watchdog failed to win the necessary retailer support and has urged the UK government to step in.
“We didn’t get their [retailers] agreement to undertakings. Under the powers that we have, we can’t set up the ombudsman, so we have referred our recommendation to [the Department for Business, Innovation and Skills] BIS,” a Commission spokesperson said.
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By GlobalData“We have laid out our case to them in the clearest possible terms and we expect that they will treat the recommendation with the seriousness it deserves.”
Retailers would be required to fund the ombudsman and have voiced concerns over the costs associated with this.
The Commission has played down these fears, estimating that the annual expense will total around GBP5m (US$8.5m), including initial set-up costs.
Peter Freeman, the Commission’s chairman, said that this was “very modest” when compared with the country’s annual grocery turnover of GBP70bn.
A spokesperson for BIS told just-food that the recommendation has raised “complex issues” that could “impact on consumers and the wider economy”.
However, the spokesperson declined to speculate how long it would take the Department to reach a decision on the Commission’s request.
The spokesperson said BIS would consider the Commission’s findings “very carefully” and issue a response “in due course”.
