Power for adjudicator to fine supermarkets in breach of code hailed by representatives

The Government's announcement that the groceries code adjudicator will have the power to fine retailers who break the Groceries Supply Code of Practice has been welcomed by industry representatives.

Supermarkets: fines will only be imposed as a last resort and large retailers will have the right to appeal - image: Su-May
Supermarkets: fines will only be imposed as a last resort and large retailers will have the right to appeal - image: Su-May

NFU head of government affairs Nick von Westenholz said: "We have campaigned long and hard to ensure the adjudicator has the necessary teeth to ensure retailers are complying with the code."

Under previous proposals, the adjudicator could only name and shame retailers found to have breached the code. "Now we know that, in cases of a serious breach, the adjudicator can resort to a serious penalty," said von Westenholz.

He added: "We know from our members that they continue to suffer from unfair treatment by some retailers, so the news that we are now in sight of having an adjudicator with the right powers to do their job hasn't come a moment too soon."

Forum of Private Business head of policy Alex Jackman said: "Supermarkets understand one thing and one thing only, and that's money. So it's just common sense for the adjudicator to be able to wield this kind of weapon as a measure of last resort in the worst cases of malpractice."

But Country Land & Business Association president Harry Cotterell cautioned: "Under today's announcement, fines will only be imposed on supermarkets as a last resort and large retailers will be permitted to appeal against fines which would then lead to protracted legal battles."

The groceries code was introduced in 2008 following a Competition Commission report into the relationship between supermarkets and their suppliers. But a bill to create an adjudicator to police it is only now passing through Parliament.

Competition minister Jo Swinson announced earlier this month: "We have heard the views of the stakeholders who were keen to give the adjudicator a power to fine, and recognise that this change would give the adjudicator more teeth to enforce the groceries code."

Retailer criticism

Reaction from retailers has been less welcoming. British Retail Consortium director-general Stephen Robertson said: "The power to impose fines is unnecessary and heavy-handed, and should be kept in reserve.

"The code already has a provision for naming and shaming retailers, and in the 2.5 years it has been operating not one supplier has needed to go to arbitration to resolve a problem with a supermarket."


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