The introduction of a supermarket adjudicator in today’s Queen’s Speech has been welcomed by farming unions, but they warned major improvements to last year’s draft Bill were needed.
The adjudicator has support from all the main political parties to ensure that the Groceries Supply Code of Practice (GSCOP) is working properly.
The setting up of the GSCOP in February last year marked the first of the key remedies outlined in the report and the Government later announced it would proceed with the establishment of an Ombudsman to oversee the GSCOP.
Both the NFU and the Farmer’s Union of Wales have said farmers across the UK will be "relieved" at the announcement which will "end unfair market practices".
A Grocery Code Adjudicator was first made clear in two reports by the Competition Commission published in 2000 and 2008.
The reports found that many big supermarkets were abusing powers in the market and were transferring ’excessive risk and unexpected costs’ to farmers, growers and suppliers.
The NFU President Peter Kendall expressed concerns that government plans to include certain provisions in the Bill will dilute the adjudicator’s ability to investigate unfair practices.
"We now hope the government will confirm its commitment to levelling the playing field in the grocery supply chain by introducing the Bill early in the new session, which starts today" he said.
"The overwhelming support the Bill already has in Parliament should ensure its swift passage and perhaps we will have an Adjudicator up-and-running before the third anniversary of the GSCOP in early 2013."
However, British Retail Consortium Food Director, Andrew Opie has said that proposals for a supermarket adjudicator will make no difference because few farmers deal directly with the supermarkets.
A report released by the BRC has said farmers are benefiting from retail investment in the food supply chain and recommends investment in supply chains.
It includes examples of collaboration which are boosting UK farmers’ returns and helping them benefit from meeting customers’ needs. Farmers are also being helped to reduce both their costs and environmental impact.
The BRC says its evidence shows the mutually-beneficial relationships which help both consumers and these farmers are already in place.
It has also said the Groceries Code Adjudicator will only cover supermarkets’ relationships with direct suppliers. It is a myth that it will make any difference to the majority of farmers.
But BRC’s report highlights that suppliers already have extensive protection, including the right to independent arbitration, under the existing Groceries Supply Code of Practice which is overseen by the Office of Fair Trading. The Adjudicator will "replicate this role and create additional, costly bureaucracy."
British Retail Consortium Food Director, Andrew Opie, said "as our evidence shows, UK food retailers are committed to working with everyone in the food supply chain, including farmers, to ensure that customers have reliable supplies of high quality, safe food, produced in ways that respect the planet, the producer and the animals involved.
But the NFU President said it was "vital" that the adjudicator has the powers to take evidence before launching an investigation.
"At present, the ability of third parties such as trade associations to provide such evidence is likely to be prohibited by the Bill, something which will seriously hinder the effectiveness of the Adjudicator."
"I recognise that some supermarkets are taking positive steps to work constructively with their suppliers and to invest in the long-term health of British farming. But retailers are too inclined to undo this good work by focusing on their own short-term financial performance and this all too often means abusing their position."
A number of associations have said short term inspections of retailers to ensure compliance, a power which was missing in the draft Bill, should be included. "The introduction of such a power will ensure that large retailers are aware that they are at risk of an inspection at any time and they will therefore need to ensure that they maintain high standards of compliance with the code at all times," said George Dunn, TFA Chief Executive.
The FUW President Emyr Jones also said "We urge the Government not to drag its heels over the establishment of a groceries adjudicator with sufficient powers to address the concerns raised by the Competition Commission."
