The supermarkets code of conduct is ineffective and legislation is pointless. Supply and demand will always drive the market.

So the competition authorities have concluded in a working paper that the voluntary code of conduct dealing with relationships between suppliers and the big retailers is ineffective. What a surprise!

The code, introduced in 2000, is ineffective because it was ill-conceived from the start. The big four thought the code would help them rebut claims regarding abuse of power.

I am still not exactly sure what behaviour the code was intended to curb. I hear a chuckle from those who knew me from my Safeway days but bear with me.

All the big suppliers, be they multinational public or private equity-backed UK businesses, are perfectly able to look after their own interests and will manage their relationship with retailers as they see fit. On that point I would suggest the collaborative agenda operating between UK retailers and manufacturers is the envy of the world. Agendas that include category management, data-led planning and supply chain efficiencies are not the norm in either the US or Continental Europe. The occasional trading spat will always break out. I dislike the bombastic behaviour that sometimes occurs during such discussions but does this really need a code of conduct to manage?

There's no getting away from the fact that smaller suppliers find dealing with the big retailers scary and at times intimidating but when they have something distinctive to offer in terms of product quality or differentiation the retailers fall over themselves and compete with each other to encourage and develop them.

When smaller suppliers operate in commodity markets, things will always be difficult and in such circumstances mergers or joint ventures with other suppliers in the same circumstances are the only way to compete and create efficiencies. Again retailers can and do play a role in encouraging such activities to mutual benefit.

I have seen this issue from the other side in the last two years as a small investor in a small Argentine wine importer. We always, of course, wish our customers would pay more, pay more quickly, not ask for promotional contributions and never look at our competitors . Do I think either voluntary codes or legislation play any part in helping us? Certainly not! We will stand or fall by the quality of our offer and our service.n

Former Safeway director Jack Sinclair is development director at SB Capital Group and director of McCurrach