ActionAid, a lobby group for suppliers into UK food retailers, has accused Asda of failing to show the right ethical credentials in the face of the competition commission enquiry into the grocery market.
In an article in The Guardian, it is claimed that Asda is asking for overseas suppliers to be excluded from a new code of conduct designed to ensure that the big four supermarkets do not abuse their buying power.
This was allegedly part of Asda’s response to the competition commission’s remedies statement, in which the commission suggested setting up an ombudsman service to help protect small suppliers and farmers. Under the proposed system, supermarkets could be forced to appoint compliance officers to ensure they treat suppliers in accordance with a new and wide-ranging code of practice.
The newspaper article said: “In its response Asda says overseas suppliers should be excluded from the proposed code because they have customers in other countries. It is understood that Asda is the only one of the main supermarkets to have made the demand.”
The existing code of practice does apply to overseas contractors, but only if they are direct suppliers and no middleman is used.
Jenny Ricks, corporates campaigner at ActionAid, said: "Faced with a true test of their ethical credentials, Asda have failed miserably. Their response clearly shows why we urgently need sensible regulation that will ensure supermarkets clean up their supply chains overseas.
"Ethical trading cannot continue to be a sideline for big UK supermarkets. This unmasks the fact that despite their ethical protestations, business as usual is continuing. We urge Asda and other supermarkets to prove they are serious about cleaning up their act by accepting the commission's remedies and stop fighting proposals that would help poor workers overseas."
ActionAid had written to Asda's chief executive, Andy Bond, pointing out that "responsible retailers have nothing to fear" and that British firms should help raise standards worldwide.
The Guardian also said that Asda believes the new code of practice would harm competition, and rejects the idea of a full-time supermarkets ombudsman, suggesting instead that the Office of Fair Trading monitor compliance with the suppliers' code.
A spokesman for Asda told the newspaper: "We have always complied with the spirit and the letter of the existing code of practice and believe in treating all our suppliers fairly, particularly those who are small or from developing countries."
