UK retailers have today criticised the government’s decision to publish the draft Groceries Code Adjudicator Bill, saying it will increase prices for consumers and achieve nothing new.
The expected extra costs associated with having to deal with a new administrative body comes at a time when businesses are already heavily regulated and when margins are being squeezed due to a slowdown in shopper spending, according to the British Retail Consortium (BRC).
Introduced by the Department for Business, Innovation & Skills this afternoon, the bill seeks to establish an adjudicator who will monitor and enforce the Groceries Supply Code of Practice (GSCP) by acting as arbitrator in disputes between retailers and suppliers.
An adjudicator would also be able to start investigations based on complaints from retail suppliers.
BRC Food Director Andrew Opie said: “The bill says the adjudicator will cost only £800,000 a year to run, to be paid for by the ten biggest food retailers.
“If the government really believes a public body can be run that cheaply it should cap the charges imposed on them at that level and commit to funding any extra costs itself.”
He added that it is in the interests of supermarkets to have good long-term relationships with suppliers, and the GSCP has already been in place for more than a year to deal with any disagreements.
“So far as we can discover, it has not resulted in even one dispute between stores and suppliers going to independent arbitration,” Obie added.
“This begs the question – what will a grocery code adjudicator do all day?”
Consumer Minister Edward Davey said that the new code will prevent unfair practices and increase certainty for retail industry suppliers, as well as stop larger supermarkets taking advantage of their positions of power.
Agriculture and Food Minister Jim Paice added: “This bill will give teeth to the Code of Practice, will mean that bad practice can be stamped out and that suppliers can raise legitimate disputes confidentially, and without the fear that they’ll be penalised for speaking up through lost business.”
The BRC noted that its views on the new bill were representative of all its members, excluding up-market grocer Waitrose.