An ombudsman to regulate the activities of the multiples is the only way to curb the worst abuses of supermarket power, according to a new coalition of trade associations representing small suppliers.
In a letter to trade and industry secretary Patricia Hewitt, the Fair Deal Group, which represents organisations including the Small Business Federation and the Country Land and Business Association,
argues that an ombudsman would be able to collect information from suppliers and mediate with retailers on their behalf to protect anonymity.
Although the OFT was supposed to act as an intermediary, suppliers had so far been reluctant to come forward as any detailed OFT investigation into individual manufacturers’ grievances would identify them to retailers. A Fair Deal Group spokesman said:“That would amount to commercial suicide.”
A regulator on the other hand could collate information from several suppliers and then approach retailers with general concerns. The Code of Practice, which has been in force for almost two years, had not had any material impact on buyer behaviour, he added.
“Our concern is that the Code should have teeth, and therefore be capable of altering behaviour of supermarket buyers and their line managers. Sadly, this is not the case at present.”
He said the OFT, which is expected to publish its review of the Code before Christmas, should define woolly terms such as ‘reasonable’ and investigate areas where the Code appeared not to be working.
The Fair Deal Group believes it should also obtain warranties of compliance from senior supermarket personnel and ensure quality training.
Elaine Watson
In a letter to trade and industry secretary Patricia Hewitt, the Fair Deal Group, which represents organisations including the Small Business Federation and the Country Land and Business Association,
argues that an ombudsman would be able to collect information from suppliers and mediate with retailers on their behalf to protect anonymity.
Although the OFT was supposed to act as an intermediary, suppliers had so far been reluctant to come forward as any detailed OFT investigation into individual manufacturers’ grievances would identify them to retailers. A Fair Deal Group spokesman said:“That would amount to commercial suicide.”
A regulator on the other hand could collate information from several suppliers and then approach retailers with general concerns. The Code of Practice, which has been in force for almost two years, had not had any material impact on buyer behaviour, he added.
“Our concern is that the Code should have teeth, and therefore be capable of altering behaviour of supermarket buyers and their line managers. Sadly, this is not the case at present.”
He said the OFT, which is expected to publish its review of the Code before Christmas, should define woolly terms such as ‘reasonable’ and investigate areas where the Code appeared not to be working.
The Fair Deal Group believes it should also obtain warranties of compliance from senior supermarket personnel and ensure quality training.
Elaine Watson
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