Supermarkets face fines for bullying suppliers

5 December 2012

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5 December 2012 | Anna Reynolds

The government has announced that the Groceries Code Adjudicator will have the power to fine supermarkets if they abuse their suppliers by falling foul of the Groceries Supply Code of Practice.

Ministers had been reluctant to impose fines on retailers, however, after listening to concerns from campaign groups and stakeholders they have now agreed to give suppliers more protection.

Liberal Democrat business minister Jo Swinson said in a statement: “[We] recognise that this change would give the adjudicator more teeth to enforce the code. We expect fines to be used as a last resort, but the fact that the adjudicator has the power to impose them will send a strong message to retailers that compliance with the code is not optional. I am confident these changes will mean the adjudicator is able to ensure fair play in the food supply chain and keep the industry growing.”

The Groceries Code Adjudicator Bill is currently passing through Parliament. Six months after it comes into effect the adjudicator will publish guidance to propose the maximum amount that can be fined. Retailers will have the right to appeal against any fines.

Alex Jackman, senior policy advisor at the Forum of Private Business, said: “The government has given thousands of small suppliers an early Christmas present with this announcement. We have always supported the concept of the adjudicator, but said it would be seriously undermined without the power to fine, without which it would have rendered a body like this unfit for purpose from the outset.”

Murray Worthy, supermarkets campaigner for the anti-poverty charity War on Want, said: “This breakthrough has only come through dedicated campaigning, with members of the public across the country pushing MPs for action to curb supermarkets’ excessive power. It is a great step towards securing fair treatment for workers around the world who pick, pack and grow our food.”

The code applies to the 10 retailers who have a turnover in the groceries market of more than £1 billion.

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