Code: OFT told to start from scratch
Exclusive Clive Beddall
Industry hopes that the multiples' proposed voluntary code of trading practice would be the automatic blueprint for the DTI's legally binding version have been dashed by the Office of Fair Trading. The Grocer understands that while the OFT will be talking to the multiples about the issue, its lawyers are drawing up a new code from scratch.
On Thursday a first draftwas expected to be sent to the industry's top five chains within a few days.
As reported last week, secretary of state for trade and industry Stephen Byers, in his report on the Competition Commission's supermarket profitability code, has charged the OFT with drawing up a legally binding code within three months.
It was widely assumed that the code produced in recent months by Asda, Morrisons, Safeway, Sainsbury, Somerfield, and Tesco, and facilitiated by the IGD, would be the obvious skeleton for the new DTI inspired version.
But a senior executive from the top five told The Grocer: "Now we're left waiting for the DTI to inflict something upon us. However, we have accepted the principle of a code and we look forward to hearing from the OFT."
The IGD facilitiated code, developed at the request of agriculture minister Nick Brown earlier this year, was drawn up after weeks of negotiations.
And this week Brown paid tribute to the "groundbreaking work" done by the IGD formulating a voluntary code.
He added: " All of this work was done before the Competition Commission's findings were known and is a constructive base for the whole of the industry to respond to the findings."
But while some Whitehall sources stress it would be unrealistic to assume the OFT would "pick up the industry code, dot a few letters and then publish it", there was speculation on Thursday that the code had fallen victim to inter-departmental rivalry in Westminster.
Said one Whitehall insider: "There's no way Byers would automatically go for Nick Brown's code. That would be seen as toadying up to the supermarkets. Given he's lost so much face in the profitability debate, he has got to be seen to be coming out with something tough from the Rip-off in grocery saga."
As reported in our last issue, many industry figures are urging the OFT to apply the idea to all retailers, not just the top five.
Suppliers argue that the government must be consistent and "build a level playing field".
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