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Remit of supermarket watchdog may be widened
The body that regulates the UK supermarkets may have its powers widened to cover the entire supply chain – including third booze party suppliers – it was announced this morning.
The review of Groceries Code Adjudicator, which was launched today by the Business Minister, will look at widening the scope the adjudicator to include indirect suppliers, alongside a formal statuary review of the performance of the Adjudicator.
The regulator oversees the ten largest supermarkets in the UK to ensure they treat direct suppliers fairly and comply with the Groceries Code, which is says ensures a robust supply chain, fair competition across the sector and a better deal for consumers.
Currently the code only covers businesses which supply the retailers directly but it is calling for views on whether to extend this remit to indirect supplier who work through a third party, giving them similar levels of protection afforded by the Code, which would cover demands for payment for better placing on shelf, among other things. This would cover wine producers who supply a distributor, for example, as well as farmers.
The ‘call for evidence’ report noted that a number of indirect suppliers and their representatives argued that the current GCA remit is unfair and leaves them vulnerable to unfair practices and without regulatory protection.
Business Minister Margot James said it was important that suppliers of all sizes get a fair deal when working with supermarkets, saying the government wanted to do all it could to help suppliers involved in the supply chain who are not currently covered by the code, but who had raised concerns.
“The Groceries Code Adjudicator is making a significant impact, with suppliers reporting that nine out of the 10 retailers covered have improved their compliance with the Code over the past year,” she said.
Since it was established in 2013, CGA Christine Tacon has carried out a major investigation into the supply chain at Tesco, which found the retailer had treated suppliers “unacceptably”, delaying payments to meet their own financial targets. The investigation carried “a clear message to all retailers that the GCA will accept no less than the principle of fair dealing demanded by the Code”, the GCA said.
Speaking to the BBC Today programme about the Tesco investigation in February 2015, Tacon noted that wine was frequently an area where there were “issues” that potentially breached the code.
The review and call for evidence will be concluded in January and a decision subsequently made in Parliament.