The UK Government has accepted calls for an independent watchdog to protect suppliers against exploitation from supermarkets.
This follows recommendations from the Competition Commission (CC) in August 2009, which found that large grocery retailers were passing on excessive risks and unexpected costs to their suppliers.
Supermarkets were initially given the opportunity to agree to a voluntary independent regulator but strongly opposed the idea.
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Announcing the decision, consumer minister Kevin Brennan said the power that large grocery retailers were able to wield over their suppliers could still 'create pressures' on small producers.
Hilary Benn, secretary of state for environment, food and rural affairs, said the new ombudsman would help protect farmers.
'The new ombudsman will help strike the right balance between farmers and food producers getting a fair deal, and supermarkets enabling consumers to get the high quality British food that they want, at an affordable price,' he said.
The Food Ethics Council said it had 'long been apparent' that the power wielded by supermarkets needed to be regulated.
'The Government must now ensure that it listens to small producers as well as big business while it consults on what shape an enforcement body should take.
'A strong supermarket ombudsman, invested with real power, would have the authority to ensure fair prices from the farm gate to the checkout,' said Food Ethics Council executive director Dr Tom MacMillan.
The British Retail Consortium (BRC), which represents the major supermarkets, said the ombudsman would allow 'big food companies' to squeeze supermarkets and that consumers would ultimately foot the bill.
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Competition Commission
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