Competition Commission urges the Government to create ombudsman to oversee Groceries Supply Code of Practice

The Competition Commission has formally urged the Government's Department for Business, Innovation & Skills (BIS) to create an ombudsman to oversee its new Groceries Supply Code of Practice (GSCOP) -- published this week.

It has called on BIS to set up the operation after attempts earlier this year to get supermarkets to voluntarily sign up to the idea failed.

Tesco, Asda, Somerfield, Co-op, Iceland, Lidl, Sainsbury's and Morrisons all rejected the ombudsman idea, claiming it would just mean extra costs for suppliers and consumers at a time when many people are strapped for cash.

But Competition Commission chairman and chairman of the groceries inquiry Peter Freeman said an ombudsman would cost just £5m a year, which is, he said, "very modest compared with the annual turnover of £70bn in grocery supplies to retailers".

He added: "We are now left with no alternative but to set out the new code of practice and recommend that BIS set up the ombudsman to oversee its operation."

His letter to BIS stated: "[An] ombudsman... is needed to decide disputes, investigate complaints and give overall credibility. Here we have reached impasse. The Competition Commission does not have the power to do this on its own. The major retailers have refused to offer suitable undertakings so we are recommending that your department should set up the ombudsman, and do so as quickly as practicable."

The NFU has agreed that the Groceries Supply Code of Practice must have the backing of an ombudsman.

NFU president Peter Kendall said: "The new code will only work if proactively and robustly enforced so the climate of fear that suppliers endure can be eliminated. This can only be achieved through the implementation of an ombudsman."

 

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