The Office of Fair Trading’s ruling on the supermarket code of conduct has been described as a “failure to regulate” by the Breaking the Armlock Alliance.

The Alliance, made up of environmentalists, pressure groups, lobbyists and farmer organisations, has consistently called for the code to be strengthened and an independent ombudsman set up to monitor and enforce the code's use.

Without this, the Alliance claimed, the big four supermarkets will continue to abuse their market share by making unfair demands on small suppliers, cross-subsidising and unfairly competing against smaller players.

John Taylor, director of local and regional economies at nef (the new economics foundation), said: "Our biggest supermarkets will not act as their own 'check and balance,' we must have regulators with teeth to protect an open market place in which the small suppliers, farmers and stores who contribute so much to communities and economies across the UK can survive."

Vicki Hird, Friends of the Earth’s senior food campaigner, said: “This decision by the OFT beggars belief. How many UK farmers need to go out of business before the OFT recognises that the supermarket code of practice protects no-one but the supermarkets themselves?

“What we need is an independent watchdog and a moratorium on further takeovers by the big four supermarkets - what we've got is a supermarket-friendly report, which leaves farmers and independent shops hanging out to dry.”

The Alliance continues to call for an independent watchdog, which will allow suppliers to bring forward complaints in confidence.

It said that under the current system suppliers are unlikely to report abuses as complaints must go through the retailer, putting their livelihoods at risk.

The Alliance is made up of: Banana Link, British Independent Fruit Growers Association, farm, Farmers for Action, Farmers' Link, Farmers' Union of Wales, Friends of the Earth, Grassroots Action on Food and Farming, International Institute for Environment and Development, National Federation of Women's Institutes, nef (the new economics foundation), Pesticide Action Network UK, Soil Association, Small and Family Farms Alliance and WyeCycle

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