Fear stops complaints

10 May 2009

11 May 2009 | Martha McKenzie-Minifie

Suppliers to supermarket giants have spoken out about a "climate of fear" that stifles complaints of unfair trading.

The Competition Commission is creating a strengthened and extended Grocery Supply Code of Practice (GSCOP), as part of an inquiry into the UK groceries market that stretches back more than three years.

In responses to the draft GSCOP - published late last month - the British Brands Group wrote that proposed enforcement provisions were too reliant on suppliers bringing complaints to be effective.

"Suppliers will not bring such claims," wrote the brand manufacturers' trade organisation.

"Whether because of the climate of fear or because the commercial risks of jeopardising crucial customer relationships, over both the short and long term, are so huge."

The Farmers' Union of Wales wrote that "redressing current imbalances in terms of retailer power" was important to its members.

But supermarkets have said more regulation could push up prices for consumers. Tesco submitted that many of its suppliers were large multinationals "many with significant market power in excess of the retailers they trade with".

It added: "Retailers play an important role in the supply chain in challenging the costs charged by large suppliers. This helps keep costs down for consumers."

The commission was considering responses before finalising the GSCOP.

It was also consulting publicly on draft undertakings to set up an ombudsman to arbitrate on disputes between retailers and suppliers and investigate complaints under the GSCOP.

SMmay2009

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