Industry welcomes introduction of fines for breaches of Grocery Supply Code of Practice

Measures before Parliament will give grocery code adjudicator power to fine retailers up to one per cent of sales turnover.

Tacon: grocery code adjudicator - image: HW
Tacon: grocery code adjudicator - image: HW

Measures to impose fines on supermarkets found to be in breach of the Grocery Supply Code of Practice (GSCOP) have been welcomed.

Business secretary Vince Cable described the measures, currently before Parliament, as "the final element in a set of powers that will give (the adjudicator) all the tools to succeed in this challenging and important role".

They will allow the adjudicator Christine Tacon to fine retailers up to one per cent of sales turnover, a figure she previously recommended, most recently on Panorama, saying the lack of a maximum figure meant she was unable to fine in practice.

The British Independent Fruit Growers' Association (BIFGA) is among the groups that called for the adjudicator's role to be strengthened to address what it called a "climate of fear" between its members and big retailers.

BIFGA chairman John Breach wrote to employment relations and consumer affairs minister Jo Swinson on 20 January, saying: "If our grower members are to continue to have the confidence to invest in new varieties, orchards, up-to-date growing equipment, efficient cold storage and modern packing facilities, they need to know that they can deal with the retailers without fear."

Breach told Grower: "It's good news, though hopefully there will never be the need for it to be used. We would still like her office to function as a full-blown regulator. We would also like to see the code strengthened to ensure that primary producers aren't paid less than the cost of production. After all, supermarkets must recognise that, in many cases, suppliers and their staff, and in turn their suppliers and their staff, are also supermarket customers, who can vote with their feet."

He urged suppliers to supermarkets to consider the British Brands Group's GSCOP/adjudicator training to better understand the role of each and how to use them in dealings with retailers.

Kent fruit grower and BIFGA member Viv Tanna said: "It's up to growers to make this work - it may not be to complain but to highlight an unusual practice. We must use it or we will lose it."

Climate of fear: suppliers not coming forward with evidence

"Evidence (of breaches of the code) is not coming forward from suppliers. I'm sure there's a climate of fear for some suppliers, but it's not the whole story. I think some are saying: 'This is the cost of doing business in the UK grocery supply chain and we build those costs into our budget.' Others are perhaps saying: 'This is the status quo of competition.' There's an important role for trade associations because if as a supplier you are reticent at coming forward, why not ask your trade association to make representations on your behalf? It gives you an extra level of anonymity and confidentiality. The UK is ahead of the world in this and there's a great deal of interest from other countries. Its success is in the hands of the suppliers and trade associations. I think if she does investigate we will see a real gear shift and everybody will see this much more seriously."

John Noble, director, British Brands Group

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