The government is to consider extending the role of Groceries Code Adjudicator Christine Tacon - but The Grocer has learnt it may not be the move the industry, especially farmers, were expecting.
Instead, sources say ministers are considering the need for a raft of powerful food and drink retailers, wholesalers and hospitality companies to comply with the Groceries Supply Code of Practice.
If such a move goes ahead it could see the likes of Boots, Booker, B&M Stores, Compass, Ocado and Poundland brought under the jurisdiction of the GCA for the first time, alongside the top 10 supermarkets.
The Department for Business, Energy and Industrial Strategy this week launched a review of the Adjudicator role and a call for evidence over whether the remit should be extended.
It sparked renewed calls for the office to be extended to cover the relationship between food producers and farmers.
The Groceries Code Action Network, a coalition of NGOs, unions and food groups, said it was vital the Adjudicator was given more power to tackle abuses throughout the supply chain.
’There is a strong case to extend the remit to cover some or all of these companies. Some may actually have a turnover approaching £1bn anyway but these certainly are key players in the food and drink industry and their actions have a major impact on suppliers’
Its 23 member organisations, including the Fairtrade Foundation, the NFU and the Tenant Farmers Association applauded the work done by Tacon, including its investigations into malpractice at Tesco and Morrisons.
But it said the watchdog’s remit should be extended to give Tacon the power to support better trading practices further along food supply chains.
influential sources
However, The Grocer has learnt influential sources are pushing ministers instead to look at a major extension of the remit further into the retail and wholesale sectors of the industry.
There are also calls for Tacon’s remit to include operators with sales below the £1bn cut-off for compliance that was set for supermarkets, on the basis that they enjoy a powerful position in niche markets (including Holland & Barrett) and local geographies (such as Dunnes and Musgrave in Northern Ireland). “There is a strong case to extend the remit to cover some or all of these companies. Some may actually have a turnover approaching £1bn anyway but these certainly are key players in the food and drink industry and their actions have a major impact on suppliers,” said one source. “The idea would be to create a much more even playing field across wider sections of the industry,” said one source.
The Grocer understands the GCA has received many complaints from suppliers about possible breaches of the Code relating to companies not currently covered by Tacon’s office.
Sources also suggest Amazon will eventually have to be covered. Business minister Margot James is overseeing the consultation, which follows repeated promises by the government, including a pledge by former prime minister David Cameron, that it will look to extend the role to cover the farm industry.
Tacon calls for engagement on prices
Retailers have a “duty to engage” with suppliers hit by soaring costs in the wake of the Brexit vote, Groceries Code Adjudicator Christine Tacon has said.
The Adjudicator revealed she had approached all the major retailers to point out the unfairness of supermarkets blanking supplier calls for price increases when around 18 months ago supermarkets had called for suppliers to accept prices moving in the other direction on the back of falling commodity prices.
“I told the supermarkets they have a duty to engage now that the shoe is on the other foot and it is suppliers coming to them,” said Tacon.
Minutes of a meeting Tacon had with supermarket Code compliance officers last month, entitled Brexit and Treatment of Currency Fluctuations, released on Friday, show she urged retailers to engage last month before revelations emerged of the Tesco bust-up with Unilever, which arose from the supplier asking for currency-linked price increases.
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