Campaigners have urged for meaningful powers to be given to the forthcoming supermarket watchdog, as MPs promised the position will be created by the end of next year. As the Groceries Code Adjudicator Bill enters its second reading in the House of Commons, campaigners have urged the government to allow the watchdog to punish abusive retailers with fines.

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The adjudicator bill was created in response to findings that major retailers in the UK are using their influence and power in the supply chain to pass excessive business risks and costs onto their suppliers, thereby undermining suppliers' ability to invest in product quality, innovation and choice. Though the government Competition Commission revealed abuse was taking place and recommended instating an ombudsperson to police the supply chain in 2008, with evidence of improper practices from as early as 2000, the position remains to be filled and the watchdog's eventual powers are still the subject of debate.

Supermarkets have been shown to force suppliers to cover the costs of 'buy one get one free' offers, lower agreed prices or change orders with little or no notice and delay payments to suppliers.

The supermarket adjudicator will enforce the Grocery Supply Chain Code of Practice (GSCOP), which supermarkets are currently obliged to adhere to, though there is not body to ensure they do so and no penalty for abusive behaviour. This week, campaigners have expressed concerns that the same powerful retailers may be influencing MPs' decisions over how the ombudsperson charged with governing supply chain relationships will operate.

Anti-poverty organisation ActionAid warned on Monday (19th November) that "heavy lobbying" from retailers had led to MPs deciding against allowing the ombudsperson to fine supermarkets that breach the GSCOP.  MPs have said that the ability to 'name and shame' bullying supermarkets, and the companies' desire to avoid negative publicity in a cut-throat marketplace, should be enough of an incentive to ensure they abide by the code. Campaigners and farming groups disagree.

Although debate is ongoing over the eventual powers the adjudicator will have at their disposal, MPs said a 'shadow-adjudicator' could be put in place before the position is officially created. Nevertheless, Action Aid said the government must stand by plans to allow the ombudsperson to fine supermarkets that treat suppliers unfairly, claiming the Supermarket Watchdog will be "toothless unless it is given the power to levy fines."

Melanie Ward, ActionAid's Head of Advocacy said on Monday, "Having got the Groceries Code Adjudicator Bill this far, it is time for the Government to stand up to the power of supermarkets. Vince Cable must give the Supermarket Watchdog the teeth to do its job effectively - the power to levy fines from Day One.

"Only with the ability to hit big supermarkets where it hurts - their profit margins - will the watchdog be able to protect vulnerable farmers and producers around the world from being treated unfairly."

Although retailers have said they will be forced to pass the cost of funding the watchdog onto consumers, MPs and campaign groups have dismissed this claim, pointing out that the cost of instating an adjudicator represents a tiny fraction of the major grocery players' profits.

NFU head of government affairs, Nick von Westenholz, added, "We want to see an adjudicator having the appropriate enforcement power, and that includes the ability to fine retailers from day one if they are in serious breach of the code."

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