Retailers have responded to calls from Lib Dem MP Andrew George for a strengthening of the supermarket code asserting that the code is forceful enough.
George released a study last month and complained that the code of practice which governs the four largest retailers’ relationships with their suppliers is "totally inadequate," he said. "Supermarkets are now so powerful they can dictate market conditions for British farmers. It is clear the government can no longer sit on its hands while the supermarkets squeeze the lifeblood from our countryside. Food supply chain relationships need rebalancing, the supermarket code must be strengthened and the Office of Fair Trading must get tough with the bully-boy tactics of the big boys."
Richard Ali, director of food policy at the British Retail Consortium has written to George to invite further discussion. "It is unfortunate that a myth is emerging that the code of practice has no force," Ali wrote. "This is wrong. The code is legally binding and covers all suppliers of groceries to the major supermarkets."
Ali also defended supermarkets’ supplier dealings. "They have an excellent track record of growing partnerships with smaller suppliers," he wrote. "These suppliers have recognised that long-term relationships with major retailers benefits them by providing a certain and growing market for their products, regular payments and on payments on time, and by benefiting from retailers’ understanding of customers."
Andrew George is due to meet with DTI minister Gerry Sutcliffe next month to discuss the need for strengthening the code and enhancing the OFT’s role.
As the Journal went to press no date had been set for a meeting between Ali and George.
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