Nothing is more certain to fail than a top-down attempt to change behaviour designed by bureaucrats with no experience of what is to be changed. GSCOP with its Adjudicator is a case in point.

First, the evidential basis for intervention remains weak. The last Competition Commission report on groceries found no evidence that retailers’ buying power discouraged innovation but claimed that by transferring excessive risk to suppliers it might do so. Beefing up the code, however, was futile if suppliers continued refusing to use it.

So, secondly, the CC capitulated to the noisy lobby for anonymity, despite the evidence it received from most suppliers that even then they still would not complain. Why? Because the Adjudicator would be duty bound to inform the retailer concerned of the substance of the complaint and at that point the supplier’s identity would be obvious.

” Even with anonymity, most suppliers will still not complain”

According to David Sables (How to Sell, 17 May, p62), supermarkets are still up to their old tricks or, in less emotive language, trying wherever possible to get the best possible results for shareholders and staff. In current market conditions, no one should be surprised. Nor is it surprising that suppliers are particularly reluctant to put usually longstanding relationships with retail customers at risk.

A common error is to treat suppliers as a homogeneous group. The biggest share of supermarket shares by value is attributable to a small number of multinational companies with strong brands. Any suggestion they are “cowering in the shadows” is ludicrous. Suppliers of retailers’ own brands are, of course, in a less powerful position, yet supermarkets are generally dependent on them and in many cases would find it difficult and costly to substitute one for another.

As the CC has found in successive inquiries, a disproportionate volume of criticism emanates from fresh produce suppliers. These tend to be relatively small in size and, due to the nature of the product, are less able to respond to unexpected, short-term changes in retailers’ demands. Not much we can do about that.

Don’t blame the Adjudicator. The responsibility for the current impasse lies elsewhere.

Kevin Hawkins is an independent retail consultant

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