Supermarket leaders have urged the government to reject calls for the remit of the Groceries Code Adjudicator Christine Tacon to be extended to cover primary producers.
The BRC told the Department for Business, Energy & Industrial Strategy inquiry, which ends next week, that trying to “bolt on” extra powers would be a departure from the principles of the GCA, which it said was set up to protect consumers, not suppliers.
The BRC also said supermarkets, who finance the Adjudicator’s role via a yearly levy, would not be prepared to extend their funding to cover thousands of further suppliers, meaning if the government wants to go ahead with the extension it would have to fund the move itself. The consortium said the adjudicator had answered the original call of the Competition Commission inquiry in 2008, which proposed a system to ensure supermarkets’ power over suppliers did not lead to an “adverse effect on investment and innovation in the supply chain and ultimately on consumers.”
“The investment retailers have made in areas like R&D, reformulation and range of products shows that the original desire by the Competition Commission to protect innovation has been met,” said BRC director of food Andrew Opie. “We believe the Adjudicator system has worked well and that Christine Tacon has been very successful in bringing the code to life. But you cannot just bolt on a whole new set of requirements which have a complete departure from the reason the Adjudicator was set up.”
Momentum has been growing among farmers for Tacon’s powers to be widened ever since former PM David Cameron said he was in favour of it back in January 2015, at the height of a dispute over milk prices.
Opie added: “Unfortunately the purpose of the Code has been either deliberately or accidently forgotten. People do want to find remedies for suppliers but our view is that if the government wants to take measures to protect producers it will have to do it independently and resource it itself. You cannot expect retailers to pay, for example, for a dairy processor’s [actions], it’s unfeasible and frankly it’s against the principle of the formation of the adjudicator, which was about protecting consumers not about suppliers.”
This week the PTF also rejected calls to extend the GCA’s remit, saying the government should concentrate on slashing the burden of red tape facing suppliers.
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