Supermarkets have poured scorn on the business minister Ed Davey’s draft bill for the establishment of a long-promised groceries code adjudicator as “ill-judged”, while suppliers’ representatives praised it as the outcome of years of hard work.

British Retail Consortium food director Andrew Opie spoke for all the multiples bar Waitrose when he said: “The supermarket adjudicator will just add costs to retailers and push up shop prices for customers.”

Davey lauded the retailers, but made clear that the adjudicator will have the teeth to stand up to them. “The government recognises that our supermarkets serve UK consumers well,” said the minister. “The adjudicator will have a very specific and defined role to ensure the Groceries Supply Code of Practice (GSCOP) is adhered to.”

The proposed functions of the adjudicator are arbitration, investigation, enforcement and advice and guidance, enabling it to investigate complaints and maintain confidentiality.

The draft also proposes that if the requirement on retailers to publish information about any breaches of the code is not a sufficient deterrent, then government will consider introducing financial penalties.

The bill puts the cost of the adjudicator at £800,000 a year, to be met by the 10 largest food retailers. “If the government really believes a public body can be run that cheaply it should cap the charges imposed on them at that level and commit to funding any extra costs itself,” said Opie. He asked: “What will a grocery code adjudicator do all day?”

The GSCOP has been in place for a year and there have been no disputes between stores and suppliers going to independent arbitration.

Opie said: “If government is set on this ill-judged course it must at the very least keep the regulatory burden and related costs to an absolute minimum, for the good of shoppers across the country.”

Meanwhile, National Farmers Union president Peter Kendall hailed the bill as bringing a better deal one step closer. “The NFU has worked tirelessly for over a decade… to put in place both an effective code of practice for retailers, and a proper body to police it.”