26 May 2011 | Lindsay Clark
Supermarkets could be fined for breaches of a code of conduct governing
dealings with suppliers, under proposals published by the government.
The Groceries Code Adjudicator Bill published this week sets out plans
to establish a watchdog that will be able to investigate breaches of the
Groceries Supply Code of Practice, which was introduced last year. Where it
finds against a retailer, it will be able to make recommendations to it,
require it to publish information about the investigation or impose a financial
penalty on the retailer. However, supplementary legislation on top of the Bill
will be required to give the adjudicator the power to enforce fines.
Consumer minister Edward Davey said in a statement: “Preventing unfair
practices and increasing certainty for suppliers will safeguard consumer
interests, as large retailers won’t be able to take advantage of their position
of power, as set out in the Code.
“This is an important step towards establishing the Groceries Code
Adjudicator, which the Government is strongly committed to.”
Agriculture and food minister Jim Paice added: “This Bill will give
teeth to the Code of Practice, will mean that bad practice can be stamped out
and that suppliers can raise legitimate disputes confidentially, and without
the fear that they’ll be penalised for speaking up, through lost business.”
However, the British Retail Consortium said the government's decision to
proceed with legislation to create an adjudicator would increase costs for
consumers, but achieve nothing new.
"Food prices are already under considerable pressure from rising
global commodity costs and climbing fuel and utility prices. Retailers are
doing their best to cushion customers from the full impact of these increases,”
said food director Andrew Opie. “The extra costs of dealing with a new
administrative body will make it even harder to keep price rises away from shop
Parliament has been invited to begin pre-legislative scrutiny of the
Groceries Code Adjudicator Bill.