Retailer watchdog review may see more farmer protection
© Design Pics Inc/REX/Shutterstock The government has announced two reviews of the supermarket watchdog, potentially paving the way for greater protection for farmers in the supply chain.
The Groceries Code Adjudicator (GCA), which was created in 2013 to ensure retailers stick to rules on fair trading, could have changes made to its role, remit and budget.
The statutory review – which has been delayed since March – will look at how effective the adjudicator has been and how it has used its powers.
See also: Supermarkets improving but more work to be done
The second review, which has been announced following pressure from a diverse range of groups, will consider whether the remit of the GCA should be extended to cover indirect suppliers, such as farmers.
Read the agricultural industry’s reaction
Consultations
To have your say in the consultations follow the links to the two documents
Currently, the GCA’s remit excludes the majority of producers and growers who supply retailers through processors, manufacturers and packers.
Critics have argued this does little to address unfair trading practices between these
companies and their suppliers when retailer pressure starts to work its way down the chain.
The announcement by the Department of Business, Energy and Industry has been expected since the end of March, but has been delayed by the EU referendum result and changes to government.
It is understood that it has been sitting in Number 10, ready to be signed off for several weeks.
Groceries Code Adjudicator Christine Tacon welcomed both the statutory review and the call for evidence on the case for extending the GCA’s remit in the UK groceries supply chain.
She encouraged those with an interest in the outcome to respond to the consultations.
Watchdog making progress, but way to go
Unfair trading practices are still rife in the industry, although they have improved.
The annual GCA/YouGov survey of supermarket suppliers shows that trading issues with retailers has dropped from 79% to 62% since the Groceries Code Adjudicator (GCA) was created in June 2013.
The sitting GCA, Christine Tacon, has received praise from the farming industry and retailers for this improvement and many, including suppliers, have said a cultural shift in the big supermarkets has started to happen.
However, Ms Tacon has also faced criticism for only launching one investigation to date (Tesco), preferring a more collaborative approach with retailers.
She also, mostly due to the government dragging its heels, has not imposed any fines so far.
However, she has repeatedly used her powers to name and shame badly behaving supermarkets, has held regular meetings with retailers to discuss issues and made a number of recommendations, which retailers must follow.
All this is likely to be taken into account by the reviews.
Industry reaction
The Groceries Code Action Network (Gcan), a coalition including, among others, the NFU, TFA, NFU Scotland, Traidcraft and The Fairtrade Foundation
“While the GCA’s annual survey, published in June, has since seen an improvement in supermarkets’ behaviour, unfair trading practices remain a real issue.
“To address this, the Gcan believes the watchdog’s remit should be extended to give Tacon the power to support better trading practices further along food supply chains.
“The group is concerned that if not, issues experienced by direct suppliers, such as missed payments or unexpected costs, are just being passed on and put others at risk of losing, or going out of business.”
Christine McDowell, food chain advisor, NFU
“The GCA way of working needs to be replicated throughout the whole food supply chain.
“We are asking for agri-sector voluntary codes of practice to be made mandatory and for the GCA to oversee these, giving them more teeth.
“This will give primary producers the confidence that their supply chains are not abusing their buyer power over that of British farmers and growers.
“Over the past three years, the GCA has been very open about her performance, and can prove through annual supplier surveys that the work she is doing with the retailers is having a positive impact for direct suppliers.”
Duncan Swift, partner and head of food advisor group as Moore Stephens
“I hope the review will yield a renewal of the GCA mandate, an extension of GCA functions and resources to investigate [and an] extension of its remit and resources to look at indirect food supplier relationships.
“I hope it will look in detail at whether the transfer from supermarkets to suppliers of adverse effects on competition.”