Her Majesty’s speech, delivered today (9 May) at the State Opening of Parliament, outlined the government’s plans to establish the UK-wide Bill and the implementation of a supermarket watchdog. It will oversee the 2012 Groceries Supply Chain Code of Practice (GSCOP) to ensure the fair treatment of supermarket suppliers.
The Bill aims to tackle the larger UK grocery retailers with a turnover of more than £1bn from varying supply agreements to ensure supermarket businesses pay suppliers within a reasonable timeframe.
Terry Jones, director of communications at the Food and Drink Federation (FDF), has welcomed the move in a statement, which said: “We are pleased that the legislation to enable the appointment of a GCA will go forward in this session of Parliament to enforce the already established Groceries Supply Code of Practice. Together these measures will address the abuses of market power identified by the Competition Commission, giving businesses – especially small and medium-sized manufacturers – the confidence to innovate and invest, which in turn secures choice and availability for the consumer.
“As the Bill proceeds through both Houses, FDF will work to establish trade associations as providers of confidential information on behalf of their members. Small suppliers need to be assured that they will not face retaliation from retailers for using the Code or speaking out about unfair practices.”
However, Andrew Opie, food director at the British Retail Consortium, said the watchdog is “in danger of adding to the cost and bureaucracy of running a grocery business without adding to the strong protection which already exists for suppliers”.
He added: “The government's initial estimate put running costs at just £1m a year, a figure the BIS Select Committee said was unrealistic. The truth is no-one knows what the cost might be. Retailers are being asked to write a blank cheque.”
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