Responding to this year’s consultation – which asked the industry for their views such as what sort of power a monitoring body should have – the Government said the new legislation is being brought forward to set up a Groceries Code Adjudicator (GCA).
The draft Adjudicator Bill is likely to be published this autumn and introduced to Parliament in late 2011. The GCA will be based at the Office of Fair Trading (OFT) and will not be called an ombudsman.
The Department of Business said that this is because an ombudsman normally deals with people whereas this body deals with business-to-business relationships within the groceries supply chain.
The GCA will have the power to receive complaints about the way supermarkets interact with their primary suppliers from anyone in the supply chain at home or overseas, and deal with them anonymously.
This includes farmers who may not directly supply the large supermarkets. Although non-governmental organisations, trade associations and other organisations cannot lodge complaints directly, they still have a useful role to play in offering advice and assistance to their stakeholders.
Minister for Food and Farming Jim Paice said:
"The businesses that grow and produce our food are worth more than £80 billion to the economy and employ 3.6 million people – and they need a fair market. The new adjudicator will help to strike the right balance between farmers and food producers getting a fair deal, and supermarkets ensuring their customers can get the high-quality British food they want at a price they can afford."
NFU President Peter Kendall said: "An Adjudicator who will have the power to investigate and rule on complaints made by anyone in the supply chain, whose anonymity is protected if necessary, is a crucial step towards rooting out unfair practice in the chain. And I'm firmly convinced an Adjudicator will benefit the whole supply chain – suppliers, retailers and most importantly consumers. I commend the new Government for following through on their election commitments and acting quickly to set out their plans.
"We haven't got everything we originally asked for - a stand-alone Ombudsman outside the umbrella of the OFT, for example. And yes, we would have liked to see the Adjudicator in place earlier than 2012. However, I recognise that a lot of groundwork has to be done and parliamentary time found in what will clearly be a packed legislative agenda over the next couple of years. Once in place, I do believe we will see fewer instances of flagrant bully-boy tactics used by the supermarkets over the years and reported to us by our members."