The Competition Commission report on the state of the UK grocery sector, published last week. concluded that the government's code of practice aimed at curbing supermarkets' power fails in its objective of protecting suppliers.

Evidence collected by the Commission from suppliers illustrated that the code was too weak. The report said that the situation for suppliers would only "worsen" if issues within the code were not addressed.

The Office of Fair Trading has begun a review process and is meeting with suppliers' groups to discuss potential improvements to the code. The Fresh Produce Consortium has been developing a code of practice for the fresh produce industry and although it is work in progress at this stage has offered its recommendations for best practice within a code that is suitably robust to support suppliers.

“There is a need to look at how the code would operate and how breeches can be brought to the attention of suppliers or supermarkets that breech them,” said Doug Henderson, FPC ceo.

The major problem at the moment is that the dispute and resolution procedure is a public affair and no supplier is likely to take on its customer for fear of the repercussions. Since the code was introduced last year, only one supplier (not in the fresh produce industry) has attempted to use it ñ unsuccessfully.

“Companies with genuine issues or grievances need to have a procedure that can address them,” said Henderson. “This [the OFT review] is an opportunity for the produce industry to define what happens ñ the code could extend in time to RDCs and on to the supermarket shelves.”

The FPC has requested suggestions from all members as to how the code can be improved for the benefit of the entire industry.

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