In its response to the government's statutory review of the Groceries Code Adjudicator, the NFU has called for the watchdog to be given more powers.  
 
The adjudicator position was created in 2013, to oversee the relationship between the UK’s ten largest supermarkets and their direct suppliers, though power to take action like fining supermarkets in breach of the code of conduct governing relations was only granted in 2015. Results from the GCA Annual Survey show that both over the last 12 months Iceland and Tesco have made improvements to their trading practices (with Tesco moving from 37% compliance with the groceries code - GSCOP - in 2015 to 65% in 2016 and Iceland from 3% to 26% compliant).  Last year Morrisons ranked bottom of the league table, in terms of compliance with the code.  Aldi and Sainsbury’s were top.

In its review response, NFU said that adjudicator Christine Tacon had driven “significant changes” in the groceries supply chain, and demanded her office be granted greater powers, including making codes of practice compulsory for retailers to abide by and extending the GSCOP to to include more retailers, foodservice and food manufacturing businesses, with coverage for the ornamentals sector.

Currently, the Adjudicator can only take evidence from supermarkets’ direct suppliers, but the union also demanded a change of rules, allowing GCA to take evidence of any breach from primary producers, who may be indirect suppliers. This was a major demand during recent spats over milk prices.

Raymond: supply chain consolidation has increased pressure on farmers

Commenting this week, NFU president Meurig Raymond said, “Farmers need to have confidence in their trading relationships to be able to invest in their businesses. This allows them to innovate and become more efficient in producing quality British food.
 
“The GCA plays an important role within the grocery sector and undoubtedly Mrs Tacon has had a positive impact since she took office in June 2013. The NFU believes the power of the GCA’s presence has enabled a change in retailer behaviour and therefore this way of working now needs to be replicated throughout the whole supply chain.
 
“It is also vital that the position remains independent. The power of intermediaries has increased in the years since the Competition Commissions investigation of 2008. Many businesses have increased their market power which they have been able to assert over suppliers and, to a lesser extent, retail customers as we have seen reported in the media over the past few months.”
 
Backing up the union’s demands, Mr Raymond pointed to “The increasing consolidation of suppliers and processors within the supply chain,” which he said has reduced competition and increased the buying power of major players, emphasising the power imbalance between retailers and their intermediaries on the one hand and their farmer-suppliers on the other. He said, “This has led to unfair trading practices [being] pushed onto producers.”
 
Mr Raymond continued, “The NFU believes more retailers, food service and food manufacturers should fall under the scope of GSCOP to ensure the principles of fair trading are inherent across the whole supply chain.
 
“The NFU is also calling for the Ornamental sector to be brought under the GSCOP legislation The industry is worth £2 billion to the UK economy but direct suppliers do not fall within the definition of ‘groceries’ in the GSCOP. This means suppliers of flowers and plants to UK supermarkets do not have the protection the GSCOP or GCA provide.
 
“We would also like to see the principles of the agri-sector voluntary codes of practice, such as the Dairy and Livestock Voluntary Code, made compulsory and overseen by the GCA to give them more teeth.  This will give primary producers the confidence that the supply chain is not abusing their buying power and position over that of the British farmer.”