Groceries Adjudicator to Have Power to Fine Supermarkets

UK - Large supermarkets who deal with suppliers unfairly could be fined by the new Groceries Code Adjudicator, as it is being given greater powers to enforce the Groceries Code, Competition Minister Jo Swinson announced Monday 4 December 2012. The announcement has been welcomed by the industry and Non Governmental Organisations (NGO's).
calendar icon 6 December 2012
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In a change likely to be widely welcomed by suppliers and farmers, the Government listened to the concerns from stakeholders to give the Adjudicator more teeth to protect suppliers from unfair treatment.

If the Adjudicator finds that retailers are breaching the Groceries Code and treating their suppliers unlawfully or unfairly, he or she will be able to apply a range of sanctions. In most cases, this would consist of recommendations or ‘naming and shaming’ but, if the breach is serious enough, the Adjudicator will have an immediate power to fine the retailer.

Jo Swinson commented: “The food industry plays an important role in economic growth, and the Groceries Code Adjudicator will help to ensure that the market is operating in a fair and healthy way. Large supermarkets form a big chunk of this industry, and generally provide consumers with low prices and variety whilst providing business for farmers and suppliers.

“But where supermarkets are breaking the rules with suppliers and treating them unfairly, the Adjudicator will make sure that they are held to account. 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."

However, fines are expected to be used as a last resort. The Adjudicator will publish guidance within six months after the Bill comes into effect to propose the maximum amount he or she will be able to fine. Retailers would have a full right of appeal against any fines imposed.

National Farmers Union (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 Groceries Code of Practice.

“This announcement by the minister shows the government is committed to putting in place a workable system too. Previously the Adjudicator could, at best, only name and shame retailers found to have breached the code. The power to fine was held only in reserve, and may never have been made available. Now we know that, in cases of a serious breach, the Adjudicator can resort to a serious penalty. We are delighted that the government has listened to us and will be amending the Bill accordingly.

“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 up and running, and with the right powers to do their job, hasn’t come a moment too soon.

“It will be critical now that we work with the Adjudicator, who we hope will be appointed shortly, to ensure the guidance they publish setting out how they will operate is fit for purpose too.”

Beverley Duckworth, Policy and Campaigns Director for anti-poverty agency ActionAid also commented on the announcement saying: “We warmly welcome the announcement that the Groceries Code Adjudicator will be able to fine supermarkets who breech the code from day one. Stronger penalties for supermarkets who abuse their market power is a crucial step in getting fairer treatment for the thousands of farm workers, here and overseas, who grow, pick and pack the goods we see on our supermarket shelves. ActionAid congratulates Jo Swinson on making sure the new watchdog has the teeth to effectively hold supermarkets to account.”

As well as the power to impose fines, the Adjudicator will also be able to:

  • arbitrate disputes between retailers and suppliers
  • investigate confidential complaints from direct and indirect suppliers, whether in the UK or overseas, and from third parties
  • hold to account retailers who break the rules by ‘naming and shaming’ or, if necessary, imposing a fine

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