Hopes that the new Government would quickly bring in a watchdog to prevent supermarkets bullying small suppliers were dashed today as officials admitted the new body would take between 18 months and two years to set up.
Ministers have agreed to create the new body, to be known as the Groceries Code Adjudicator (GCA), but a bill to enable its formation will not be brought before Parliament until early next year.
The body will investigate anonymous complaints made by farmers or any other suppliers to supermarkets, even if they don't supply them directly. NGOs and trade bodies, such as unions, will not be able to lodge complaints but could help individual suppliers do so.
Initially, officials say, the body will attempt to 'name and shame' any supermarkets which are found to be abusing their power. If that fails to bring about a change in behaviour, the body will be able to levy fines to resolve any successful complaints made to it.
Ten years of waiting
The bully-boy tactics of supermarkets were first brought under investigation by the Competition Commission (CC) more than a decade ago, but the recommendation to create a dedicated watchdog only surfaced in August 2009. The CC said at the time that supermarkets were 'abusing their power' by passing on excessive risks or unexpected costs to their suppliers. The recommendation was accepted by previous Government earlier this year.
All three main parties committed in their election manifestos to creating an independent watchdog. However, major retailers strongly opposed the move saying it was an 'unnecessary quango' that would allow larger suppliers to put pressure on supermarkets, for which consumers would ultimately foot the bill.
'The existing code of practice was strengthened and extended as recently as February,' said the British Retail Consortium, which represents major retailers. 'It now applies to all the top ten biggest grocery retailers. It gives suppliers more protection and a new right to independent arbitration to resolve disputes. Its effectiveness over several years should be assessed before any decision to introduce further regulation.'
Not an ombudsman
Food and farming minister Jim Paice said that the new adjudicator would 'help strike the right balance between farmers and food producers getting a fair deal, and supermarkets ensuring their customers can get the high-quality British food they want at a price they can afford.'
He also explained that the body would be known as the Groceries Code Adjudicator not, as previously suggested, an 'ombudsman'. An ombudsman normally provides effective redress mechanisms for individual consumers and citizens, but the new body will be dealing with business-to-business relationships within the groceries supply chain.
| READ MORE... | |
 |
NEWS Government agrees to supermarket watchdog Supermarket ombudsman will enforce a new code of practice between retailers and their suppliers |
 |
HOW TO MAKE A DIFFERENCE How to stop a supermarket opening in your area Battling superstore monopolies needn’t be a lone crusade. Kate Eshelby looks at some of the resources available |
 |
HOW TO MAKE A DIFFERENCE CASE STUDY: making local food sexy in Suffolk How do you turn people on to local food and away from supermarkets? One way is to celebrate it through 'adventures', from wild food barbecues to scrumptious feasts of locally baked foods |
 |
HOW TO MAKE A DIFFERENCE How to set up your own local food co-op Food co-ops are a way of buying fresh, locally grown food for less money. Sustain have produced an online resource, 'the Food Co-ops Toolkit', that explains how to start one up |
|
COMMENT Toothless Tory 'ombudsman' won't solve supermarket problem It's high time we had a supermarket ombudsman, but it needs to be proactive and powerful, says Caroline Lucas |
