The government has confirmed that the Groceries Code Adjudicator bill will give the watchdog the power to fine supermarkets who unfairly deal with their suppliers.
The adjudicator will also be able to publicly ‘name and shame’ retailers in breach of the Groceries Supply Code of Practice (GSCOP).
Although employment relations minister Jo Swinson admitted that fines will be used as a last resort, she believes the power to fine will send out a strong message across the supply chain.
“Large supermarkets provide a lot of business for farmers and suppliers, but we have listened to our stakeholders and agreed we must ensure that supermarkets who break the rules can be fined and held to account,” she pointed out in her statement.
The announcement has met with mixed reaction from within the fresh produce industry. One leading vegetable supplier told FPJ: “Nobody in fresh produce will say anything about the supermarkets as if he does his card will be marked and his life expectancy as a supplier will be limited.
“If this adjudicator is to work then it must provide discretion or you’ll only see suppliers coming forward who are getting the sack, and have nothing to lose.”
The British Retail Consortium believes the power to fine supermarkets is a step too far.
Stephen Robertson, director general at the organisation, explained: “What kind of message does this send about the government’s attitude to Britain as a place to do business?
“We’ve long maintained that the power to impose fines is unnecessary and heavy handed and should be kept in reserve.”
However, the NFU welcomed the amendment to the bill and says it will work with the adjudicator to ensure suppliers are treated fairly.
“We are delighted that the government will be amending the Bill as we know from our members that they continue to suffer from unfair treatment by retailers,” said Nick von Westenholz, the NFU’s head of government affairs.
The adjudicator will publish guidance within six months after the bill comes into effect to propose the maximum fine that can be imposed, and retailers will have the right to appeal.
