Consumers and suppliers will benefit from Supermarket Ombusdman say NFU

The establishment of a supermarket ombudsman will benefit the whole supply chain – suppliers, retailers and most importantly consumers – and supermarkets should sign up to its creation, the NFU said today.

The Competition Commission has today published for consultation draft details of the proposed Grocery Ombudsman which would police the new Grocery Suppliers Code of Practice, which itself was the subject of a consultation last month. Both remedies were proposed by the Competition Commission following an exhaustive investigation into the grocery market which identified a number of adverse effects on competition.

NFU President Peter Kendall said: "These draft undertakings demonstrate that the Competition Commission has held its ground, anticipating that the remedies should be implemented as originally proposed and I am relieved it has not been swayed by disingenuous short-term scaremongering by retailers.

"I am especially pleased to see that the ombudsman will retain his broad discretion to determine when he should initiate an investigation and I applaud the hybrid funding formula which favours retailers who deal fairly and do not abuse their market power.

"An ombudsman acting as a proactive enforcer of a strengthened code of practice would give suppliers the confidence to invest and innovate and produce a greater range of quality products for consumers, and is therefore clearly in consumers’ best interests, as both the Competition Commission and Professor Roger Clarke’s independent research stated."


Claims by retailers that the cost of an ombudsman will lead to increased prices for consumers were recently dispelled in independent research by leading economist Professor Roger Clarke.

Prof Clarke said: "The remedies, if effectively enforced, are likely to lead to lower prices in some cases, like agricultural products. Even very small price reductions and other benefits are likely to result in consumer benefits far outweighing the modest cost of the ombudsman. A supermarket watchdog would not only benefit consumers but also be, arguably, in the interests of the supermarkets themselves."

Practices such as retrospective changes to unit prices that supermarkets pay suppliers and rebates from suppliers without prior agreement were exposed by the Competition Commission’s inquiry which received submissions about poor practices employed by a variety of major retailers.