Retail ombudsman planned

7 May 2008
More news

08 May 2008 | Jake Kanter

The Competition Commission (CC) is to press ahead with plans for a regulator for supermarket supplier relationships, despite protests from retailers.

The new Groceries Supply Code of Practice, published last week as part of the CC's final report into the sector, will replace the existing Supermarket Code of Practice and provide increased protection for suppliers (News, 28 February).

The changes will affect retailers with a turnover of more than £1 billion. The ombudsman will mediate disputes and investigate retailers' records if suppliers complain about them. Retailers will also have to establish an in-house compliance officer to help enforce the code.

The idea has been heavily criticised by the supermarkets (News, 24 April). But the CC will need co-operation from them to establish the ombudsman. If an agreement is not reached, the CC will turn to the Department for Business Enterprise and Regulatory Reform to help impose the regulator.

The scheme remains unpopular among three of the big four supermarkets. Sir Terry Leahy, chief executive of Tesco, said in a statement: "An ombudsman would be counter-productive and would reduce the benefits of competition."

Asda said the figure could cost the industry "hundreds of millions" of pounds and lead to higher prices for consumers, while Sainsbury's stressed it was "unnecessary". Morrison's didn't comment on the ombudsman, but stated it "always deals with suppliers fairly".

Peter Freeman, chairman of the CC, said retailers with good practices and relationships have nothing to fear. "We think that it would be in everyone's interest that a code governing retailers and suppliers enjoys the confidence of all those involved."

SMmay2008

LATEST
JOBS
Swindon, Wiltshire
upto £40K base (+ Paid overtime and corporate benefits)
Honda Manufacturing Ltd
Kew gardens, Richmond upon Thames, London (Greater)
£37,000 - £42,500 per annum pro rata, depending on skills and experience
Kew Royal Botanic Gardens
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE