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Groceries adjudicator gets power to fine supermarkets

By Mike Stones , 05-Dec-2012

News that the Groceries Code Adjudicator will have power to fine supermarkets if they break the Groceries Code of Practice has been welcomed by the food manufacturers, farmers and poverty campaigners.

Jo Swinson, the Liberal Democrat business minister, said yesterday (December 4): “Where supermarkets are breaking the rules with suppliers and treating them unfairly, the adjudicator will make sure that they are held to account.

“We have heard the views of the stakeholders who were keen to give the adjudicator a power to fine, and recognise that this change would give the adjudicator more teeth to enforce the groceries code.”

The Food and Drink Federation (FDF) said that with With the Grocery Supply Code Of Practice in place for over two years it had always been very clear that the Groceries Code Adjudicator Bill should deliver "an accompanying proactive and robust adjudicator" with the ability to take evidence from third parties.

Terry Jones, FDF communications director at FDF, told FoodManufacture.co.uk: "The BIS [Department for Business, Innovation and Skills] decision that fines should be on the face of the Groceries Code Adjudicator Bill will undoubtedly give the role more teeth. We hope that the inclusion of the amendment will not significantly impact on the timetable for establishment or efficient operation of the adjudicator."

‘The necessary teeth’

The National Farmers Union (NFU) head of government affairs Nick von Westenholz welcomed the decision to equip the adjudicator with “the necessary teeth” to ensure retailers are complying with the Groceries Code of Practice.

“Previously the adjudicator could, at best, only name and shame retailers found to have breached the code,” said Westenholz.

“The power to fine was held only in reserve, and may never have been made available. Now we know that, in cases of a serious breach, the adjudicator can resort to a serious penalty. We are delighted that the government has listened to us and will be amending the Bill accordingly.”

Westenholz reported that NFU members continue to suffer from allegedly unfair treatment by some retailers.

Food manufacturers have long accused some retailers of unreasonable behaviour when setting supplier prices and later changing payment terms.

The level of fines available to the independent adjudicator will be set by the business secretary Vince Cable. They are expected to apply only to the largest retailers.

Swinson said the government expected fines to be a last resort but their existence would send “a strong message to retailers” that compliance with the code is not optional.

Ensure fair play

“I am confident that these changes will mean that the adjudicator is able to ensure fair play in the food supply chain and keep the industry growing.”

Murray Worthy, supermarkets campaigner for the anti-poverty charity War on Want, said: “We welcome the government’s announcement today that its supermarket watchdog will have the power to impose fines for bullying suppliers.”

Worthy attributed the decision to dedicated campaigning, with members of the public across the country pushing MPs for action “to curb supermarkets’ excessive power”.