The Government has today published the response to its consultation to take forward the establishment of a body to monitor and enforce the Groceries Supply Code of Practice (GSCOP). The Department for Business will bring forward new legislation in order to set up the GCA, which will reside within the Office of Fair Trading (OFT).
The GCA will have the power to receive complaints about the way supermarkets interact with their primary suppliers from anyone in the supply chain at home or overseas, and deal with them anonymously. This includes farmers who may not directly supply the large supermarkets. Although non-governmental organisations, trade associations and other organisations cannot lodge complaints directly, they still have a useful role to play in offering advice and assistance to their stakeholders.
Consumer Minister Edward Davey said:
“We want to make sure that large retailers can’t abuse their power by transferring excessive risks or unexpected costs onto their suppliers. These sorts of pressures are bad for producers and bad for consumers - ultimately they can lead to lower quality goods, less choice and less innovation.
“The Adjudicator will be able to step in to prevent unfair practices continuing - ensuring a fair deal for producers and safeguarding the consumer interest.”
Minister for Food and Farming, Jim Paice said:
“The businesses that grow and produce our food are worth more than £80 billion to the economy and employ 3.6 million people - and they need a fair market. The new adjudicator will help to strike the right balance between farmers and food producers getting a fair deal, and supermarkets ensuring their customers can get the high-quality British food they want at a price they can afford.”
These proposals to establish the GCA as set out in consultation response will require primary legislation. The Department for Business will be seeking Parliamentary Business and Legislation Committee approval to publish a draft Bill later this year with the intention of bringing forward a Bill in the second Session.
Notes to editors:
1) The Groceries Supply Code of Practice has been in place since 4 February 2010 and was introduced by the Competition Commission (CC).
2) The consultation document can be found here: http://www.bis.gov.uk/policies/business-law/competition-matters/market-studies/cc-market-investigation-on-the-uk-supply-of-groceries It sought stakeholders’ views on:
What powers the body monitoring and enforcing compliance with the GSCOP should have, in addition to the body being able to hear anonymous complaints;
Access to the body;
Who the monitoring and enforcement body could be, including some possible options;
Should a sanctions regime be introduced and how might it operate alongside any appeals mechanism; and
The funding of the body monitoring and enforcing compliance with the GSCOP.
3) Although the GCA will be based within the OFT, it will remain independent of and separate to the OFT’s Executive. This means the decisional route will be independent of the OFT’s normal activities and it will not be answerable to the OFT’s Board. This is similar to the Contracts Rights Renewal Adjudicator, which is ring fenced within OFCOM.
4) The Government will call the body the Groceries Code Adjudicator not as an “Ombudsman”. An Ombudsman normally provides effective redress mechanisms for individual consumers and citizens but this body is concerned with business-to-business relationships within the groceries supply chain.
5) Funding for the GCA will come from supermarkets and will be based on turnover and compliance with the GSCOP.
6) For further information, contact Olivia Campbell on 020 7215 5363 or Olivia.Campbell@bis.gsi.gov.uk
7) The Government’s response can be found here: http://www.bis.gov.uk/policies/business-law/competition-matters/market-studies/cc-market-investigation-on-the-uk-supply-of-groceries
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Notes to Editors
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