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New Bill passed to ensure supermarkets treat food suppliers fairly

26 April 2013

In a move that will have a major impact on UK food processing firms, it has been announced that the Groceries Code Adjudicator Bill has been given the Royal Assent. This is the UK’s first independent adjudicator to oversee the relationship between large supermarkets and their direct suppliers.

The GCA designate, Christine Tacon (pictured) will be responsible for enforcing the Groceries Supply Code of Practice (GSCOP), which covers interactions between the 10 largest supermarkets with an annual turnover of more than £1billion and their direct suppliers.

“The public want to know that suppliers are being treated fairly and it is vital, in my role as Adjudicator, that I improve the business environment for direct suppliers to the trade,” said Tacon. 

According to Competition Minister, Jo Swinson, the GCA will make sure that large supermarkets abide by the Groceries Supply Code of Practice and treat their suppliers fairly and lawfully.

“This will give suppliers the stability to help them grow, innovate and compete in the market,” said Swinson. “That is why I’m delighted the Bill achieved Royal Assent today. I am sure that the Adjudicator will make strides towards delivering fairer food supply chains and stronger growth in the industry.”

The Code was established by the Competition Commission in 2010, after their 2008 market investigation found some large retailers were transferring excessive risks to their direct suppliers. In April 2008, the Competition Commission completed an inquiry into the UK grocery market, following long running concerns that the four major chains exploited their market power to put undue pressure on suppliers and to compete unfairly with smaller retailers.

While the Commission said the supermarkets were delivering a ‘good deal for consumers’, it concluded: ‘the transfer of excessive risk and unexpected costs by grocery retailers to their suppliers through various supply chain practices if unchecked will have an adverse effect on investment and innovation in the supply chain, and ultimately on consumers.”

The new Groceries Code Adjudicator Bill will come into force in June 2013.

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