Following the announcement in the Queen’s speech that the groceries adjudicator bill will begin its progress into law during this parliamentary session and the bill’s publication in the House of Lords on 10th May, farming groups have called for the ombudsperson to be given more clout to better investigate supermarket abuses.

Created in response to concerns that large retailers are using their power and influence to further squeeze their farmer suppliers, who are already suffering the effects of rising input costs, through inequitable contracts and reneging on supply agreements, the bill will instate an ombudsperson to police the supply chain, monitoring the business practices of the UK’s ten largest supermarkets.   

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Today, George Dunn, chief executive of the Tenant Farmers Association has called for the watchdog to be accorded "Parachute Powers," allowing the ombudsperson to descend on retailers suspected of inequitable practices with little or no prior notice.

Dunn said his organisation believes it is "vitally important that the adjudicator has sufficient powers to ensure fairness in the groceries supply chain" and opined, "I cannot see how this will be possible without powers to investigate concerns on a proactive, no or short notice basis".

He elaborated, "If we take the recent price changes in the dairy sector as a case in point the suspicion has been that retailer pressure caused the domino effect in prices across the processing sector and that it looks likely to happen again later in the year.  If the adjudicator had the power to "parachute in" to a retailer or group of retailers on a particular issue when there was a concern of unfair practice like this, it would be able to get to the core of the issue quickly.  However, more than that if retailers are made aware that they are at risk of an inspection at any time this will provide an incentive to ensure that they maintain high standards of compliance with the code at all times."

The TFA head pointed out that the measures it wants to see applied to the groceries adjudicator already exist in monitoring bodies for schools and financial services, and said their inclusion in the bill would “ensure compliance with the rules established for the greater good of us all”.

Upon the bill’s announcement, retailers’ organisation the British Retail Consortium reacted strongly to the news, claiming that funding the adjudicator could result in rising grocery prices, though these assertions were widely rejected and condemned by farming groups and MPs. Farming Minister Jim Paice last week dismissed the claims as “pathetic” and assured that, as all retailers subject to monitoring have an annual turnover in excess of £1bn, the cost of funding a watchdog, estimated to be £200,000pa, would be negligible for the supermarkets.  

The adjudicator will uphold the Grocery Supply Chain Code of Practice, which was introduced two years ago, though farming organisations have documented widespread abuses of the code as there is currently no enforcement body to protect the smaller players in the supply chain. According to the Department for Business, Skills and Innovation, the ombudsperson will “arbitrate disputes between retailers and suppliers, investigate confidential complaints from direct and indirect suppliers to end the ‘climate of fear’ in the supply chain and hold to account retailers who break the rules by ‘naming and shaming’ or fining supermarkets.”

The bill will receive its second reading in the House of Lords tomorrow.

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