14 January 2010 | Jake Kanter
The UK government has agreed to appoint an ombudsman to oversee supermarket supplier relations.
Consumer minister Kevin Brennan said yesterday that the Department for Business, Innovation and Skills had accepted the recommendation of the Competition Commission (CC) to introduce a “supermarket enforcer” to ensure vendors are treated fairly.
The regulator will ensure retailers adhere to a strengthened Groceries Supply Code of Practice (GSCOP), which comes into force on 4 February. It follows the CC’s two-year investigation into the industry.
A consultation period will begin next month on how best to impose the GSCOP and the extent of the ombudsman’s powers.
Some of the UK’s biggest retailers - including Asda, Morrisons, Sainsbury’s and Tesco – have consistently opposed the scheme and it is likely they will pick up the estimated £5 million bill for running the regulator.
“The power large grocery retailers remain able to wield over their suppliers can still create pressures on small producers, especially in these difficult economic times, which ultimately may impact on consumers,” Brennan said. “Free and fair competition is the key to a healthy market.”
Business and farming groups welcomed the decision. The National Farmers’ Union described it as a “victory for common sense and consumers”. But the British Retail Consortium said the regulator would cost customers millions of pounds.