Following retailers’ petulant reaction to the announcement made in the Queen’s speech that the government will be instating a supermarket ombudsperson to ensure the country’s richest supermarkets are not exploiting their suppliers, politicians and farming unions have moved to defend the Bill.

The Retail adjudicator Bill, which will start its passage into law in the House of Lords next week, has been welcomed by farming unions and politicians after two years of planning. The fiercely contested issue of allowing complaints and evidence from third parties was settled last week to the relief of farmers; two committees of MPs had advised that the watchdog should be given more powers to collect information and act on incidences of abuse.  

Furthermore, if naming and shaming supermarkets found to be violating the Grocery Supply Chain Code of Practice (GSCOP), which the ombudsperson will uphold, is ineffective and a resolution cannot be made otherwise, the adjudicator will also be able to fine retailers, subject to the agreement of the secretary of state.

Upon the bill’s release, NFU president Peter Kendall welcomed MPs’ "Strong stance against an intense lobbying campaign by retailers" in ensuring the adjudicator will be able to do their job fully and effectively.  

However, the British Retail Consortium reacted strongly to the news last week, saying the bill "duplicates an existing supply code of practice and writes a blank cheque on behalf of the retail sector." Andrew Opie, the BRC’s food director, denied there is a need for greater scrutiny of supermarket practices and said of the bill "The proposed adjudicator 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. The Government's initial estimate put running costs at just £1million 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. "

Mr Opie also suggested the cost of employing a supermarket ombudsperson could push up the price of groceries.

Reaction to retailers’ denial

Farming unions have reacted strongly to retailers’ assertions, accusing them of attempting to ‘muddy the waters’ over the forthcoming bill. Responding to the BRC’s claims, the NFU said in a statement this morning, “There is no doubt that some supermarkets are taking positive steps to work constructively with their suppliers, but retailers are driven by their own short-term financial performance, which all too often leads to them abusing their significant market power and treating suppliers unfairly. We continue to hear of producers and suppliers being subjected to unfair practices and the GSCOP lacks a proper enforcement body with powers to investigate complaints. This is why the Adjudicator is essential.”

Farming Minister Jim Paice dismissed claims that the ombudsperson could push up the price of food; he said that, as the watchdog will only be funded by and arbitrate between the ten largest retailers in the UK and their suppliers, the cost will be a miniscule proportion of the supermarkets’ turnovers.

As all of the supermarkets which will be monitored by the ombudsperson have a turnover in excess of £1 billion and the adjudicator is forecast to cost £200,000 a year, the NFU said the watchdog will, “at the very most, represent 0.02 per cent of [supermarkets’] turnover, and usually much, much less.”

Mr Paice responded to retailers’ jeremiads, “The cost issue is pathetic. It’s up to them how much they are affected. If they comply with the code that’s been in place for two years the Adjudicator won’t have much to do.”

Meanwhile, supermarket giant Sainsbury’s today announced it will attempt a rapprochement with its suppliers by maintaining a presence at various rural shows this summer. Sainsbury's said it would "Help people become more aware of the fantastic British produce we sell" at a number of shows across the country. The supermarket said its presence at the shows will principally highlight animal welfare and British sourcing policies the supermarket is engaged in or is planning to introduce.

MPs have said the new bill will pass through parliament rapidly and that an adjudicator may be instated as early as next year. More information from the National Farmers’ Union on the Grocery Adjudicator Bill is available here, including a section tackling ‘myths and misconceptions’.

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