Western Morning News - Neil Parish welcomes supermarket watchdog

Neil Parish MP has written in the Western Morning News on the importance of the Groceries Code Adjudicator Bill, announced in the Queen’s Speech. There was much to welcome in The Queen’s Speech to both Houses of Parliament on Wednesday and the programme of Government legislation has been set. I will be writing in greater detail on what this means for us in Devon elsewhere but for the moment I will concentrate on just one measure announced in the Queen’s Speech that will protect farmers and producers from bully-boy tactics in the food supply chain by supermarkets. I am of course talking about the long awaited Groceries Code Adjudicator Bill, that when it is made into law, will establish this supermarket watchdog to oversee the Groceries Supply Code of Practice (GSCOP) which applies to all retailers with groceries turnover in excess of £1 billion per year. Crucially it will also act as an independent ombudsman that will arbitrate disputes between retailers and suppliers, investigating complaints made by suppliers and act against retailers who break the rules. This is essentially about that wonderful, if slightly overused, term “fairness”. Supermarkets, particular the few large ones that dominate the retail market, have been able to increase their profits at the expense of food producers by using their considerable muscle to drive down the price that they pay producers below the cost of production. Milk prices are now below the cost of production and pork prices are £20 per pig below the cost of production. As the Competition Commission put it in 2008, the supermarkets are “transferring excessive risk and unexpected costs to their suppliers”. Supermarkets are of course entitled to seek out competitive deals and engage in price wars with their rivals. This is all part of a healthy free-market and keeps the price of food down for the consumer. However, unfair practices in the supply chain do not drive down prices to the consumer but drive down the price paid to the producer. No one but the supermarkets benefits from these practices, and at a time when the largest supermarkets are posting record profits, it is right that producers get a fair bite of the cherry. Many producers are suffering financial hardship as a result and many are leaving the industry entirely. It is for this reason the Draft Groceries Code Adjudicator Bill was announced some months ago it was met with broad cross-party support, as well as from groups like the National Union of Farmers (NFU) and the Federation of Small Businesses (FSB). The Groceries Code Adjudicator Bill will receive its first reading in the House of Lords on Thursday 10th May and will make its way through various stages of legislative scrutiny from both Houses of Parliament before it becomes law and it is through this process that certain key concepts must be included to make this Bill to make sure that supermarkets play by the rules and that producers have confidence that their complaints will result in a proper investigation and that companies breaking the rules will be held to account. The Groceries Code Adjudicator must have sufficient powers to properly pursue complaints made by suppliers and to demand information from supermarkets in connection to their investigation. It is also important to ensure that producers can make a complaint about unfair pricing tactics anonymously. Without this protection many producers would be too worried about losing their contracts and would be unwilling to rock the boat. It is also important that third-parties, such as Unions and Trade Association, are able to submit complaints to the Groceries Code Adjudicator on behalf of producers, including farmers, so they may benefit from their legal advice and support. The British Retail Consortium, the trade association that represents a range of retailers including the larger supermarkets, has already made its opposition known to this Bill. It has said that it will “add costly bureaucracy and replicate the work of the GSCOP”. I have never met a turkey that has voted for Christmas so I am not surprised to hear of their opposition to a body that will act as a deterrent to unfair treatment of suppliers. Part of the problem is that right now the GSCOP is not being properly enforced properly and suppliers are being left to fend for themselves. It is for this very reason that the Groceries Code Adjudicator is to be created. Supermarkets that treat their suppliers correctly and who do not break the rules have nothing to fear from the Groceries Code Adjudicator and their customers can buy their produce safe in the knowledge that suppliers and farmers and being properly treated.