The government has agreed to implement Competition Commission recommendations for a supermarket ombudsman and watchdog.
The new body will police the Groceries Supply Code of Practice (GSCOP) to protect suppliers from abuse of power by large retailers. Farmers and other suppliers have waged a 10-year campaign for fair prices and purchasing policies.
The code was a key recommendation of the Competition Commission in its report into the grocery sector in 2008. It is due to come into effect next month, and will be followed by a government consultation on the role and powers of the ombudsman.
David Greene, senior partner at Edwin Coe LLP and competition expert, says: “Our view was always that there should be a strong policing of the code of practice because otherwise it may have little effect.
“The ability to bring in the ombudsman on an anonymous basis may alleviate the fear that in the event of complaint the supplier will be targeted by the supermarkets.
“We had advocated the appointment of a regulator for the code of practice so that the appropriate officer could instigate investigations and take independent action to forestall abuse of the relationship between the big supermarkets and their suppliers. The government has not gone that far but this first step toward some form of policing of the code of practice is very welcome. We will have to see how it works in practice but hopefully it will stop abuses by the supermarkets of the relationship with suppliers including the farmers.”
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