Groceries Code Adjudicator Debate

Speaking in a debate on the grocery adjudicator, Neil Parish asks when it will be introduced as supermarket customers want to be sure that a fair amount of the money is paid to food producers.Neil Parish (Tiverton and Honiton) (Con): I welcome this debate, introduced by my hon. Friend the Member for South Staffordshire (Gavin Williamson), because it is so necessary that the question of an adjudicator should be discussed. Many hon. Members have made the point that the issue has cross-party support, and with other hon. Members I urge the Minister to give a clear timetable of exactly when the grocery adjudicator will come into being. It is essential that we send the right message to the industry, supermarkets and consumers.Many hon. Members have said that we are all champions of the consumer, because our constituents and voters are all consumers, and they are keen to get a good deal. They are keen to ensure that when they buy from supermarkets, a fair amount of the money goes back to those who produce the goods-the meat, milk, vegetables and so on. They want a fair share to go into the pockets of those who produce the goods.Philip Davies: My hon. Friend will know that the supermarket industry is worth about £130 billion a year. If the outcome of having an ombudsman is that a bigger slice of the cake goes to producers, and they receive perhaps only 1% more income, that will add £1.3 billion to food bills. Given that people are already struggling to pay their bills at this difficult time, why does my hon. Friend want to add another £1.3 billion to people's food bills, including those of his constituents?Neil Parish: Quite the opposite. I do not want to add another £1.3 billion to consumers' bills, but to make sure that the supermarkets are not taking £1.3 billion extra in profit from the overall trade when they are not entitled to it. They have used their muscle in the marketplace to drive down the price that they pay producers. To be perfectly honest, I have no sympathy with my hon. Friend's position. Tesco has 32% of the retail trade, and if that is not a huge monopoly position, I will eat my hat.Andrew George: Is it not telling that, in the teeth of the most recent recession, the largest supermarkets were posting record profits?Neil Parish: Absolutely. I welcome the hon. Gentleman's comment. Again, to take a wonderful, if perhaps slightly overused, word, this is all about fairness. The supermarkets have huge investments, and they are entitled to a fair profit, but if they use their situation to drive prices down for the producer and keep prices up for the consumer, they are taking too much out of the market.Those of us who represent rural constituencies very much want agriculture and the growers to get a fair deal from the marketplace. I spent 10 years in the European Parliament; we can talk about the common agricultural policy and about whether we should be subsidised. In the end, however, it would be far better if farmers did not have to be supported through a subsidy. What they actually want is a fair deal from the marketplace.Historically, the previous Government held an inquiry in their early days into Milk Marque, a large co-operative that bought 37% of the milk in this country. Subsequently, the Office of Fair Trading split the organisation up because it was considered a monopoly. We now have a supermarket with 32% of the trade in this country, but it is not considered a monopoly. I am not going to push the Government to go to war with Tesco, and nor do I want to go to war with Tesco, but I want to put clearly on the record that we must stop being so mealy-mouthed about these things, because, in the end, these guys have huge power.My hon. Friend the Member for South Staffordshire put it very well when he talked about his pottery business. He said he had a large buyer, who had come along and said, \\I'm not going to accept the deal that we've done. I want to pay you less. I want to pay you late. That is the deal. Take it or leave it.\\ That is what the adjudicator needs to sort out as far as food production is concerned. They have to make sure that buying power and scale do not drive prices down.When the supermarkets decide to have a price war, all consumers are grateful. I would be the last to say that such things should not happen, because that is competition. However, when the supermarkets go into that price war, they must not turn around and tell producers, \\Okay, we're having a war with our neighbouring supermarkets, so we will drive down the price we pay you.\\ They then drive prices down to below the cost of production. Milk prices are now 3p or 4p below the cost of production. Pig prices are £20 per pig below the cost of production. Cereal prices are probably the highest we have seen for many years, if not the highest we have ever seen. That is adding to industry's costs, but it is not reflected in the price that the supermarkets and big buyers pay producers. That is why we are so keen to have an adjudicator.I agree with my hon. Friend and other Members that the adjudicator must have real teeth so that they can take action to stop abuses. I do not think that there will be a huge bureaucracy and a huge problem, provided that the adjudicator has the right muscle and teeth. If they do, they will not need to be used in most cases, because the producer, processor or whoever will be able simply to threaten to go to the adjudicator. That is when the system will really work-not when people have to go through the whole process. People need to be able to go to somebody who can check what is happening.Smaller producers, in particular, do not need necessarily to declare exactly who they are. I know that that is a more difficult issue, but there is such huge pressure on smaller producers to avoid being targeted by those with power in the market. Edward Heath, who was perhaps not always the most popular man in the world, spoke about the unacceptable face of capitalism, but is what we are talking about perhaps not the unacceptable face of the market? As a Conservative, it is perhaps dangerous for me to talk of such matters, but if there are huge, dominant players in the market, smaller producers can be pushed out of business.I am sure that the adjudicator will be welcomed across the House, but I have one final point for the Minister, to which I am sure he will respond when he sums up. I thank my hon. Friend the Member for South Staffordshire for raising this essential issue, but I wonder whether we can have a real time scale for the Bill. It was to have been published before Easter, and I accept that Easter is coming and that we are obviously not going to see it. When will it come out? How long will the draft stage take? One or two Members, including the hon. Member for Ynys Môn (Albert Owen), asked whether we need a draft and whether the issue is being kicked into the long grass. I do not believe that it is, but the Minister needs to reassure us of that, because many people are pinning great hopes on the adjudicator.| Hansard