Groceries Adjudicator must get tougher on retailers

Farm groups believe GCA Christine Tacon could do more to tackle unfair treatment of suppliers and have criticised the adjudicator’s remit for ‘not going far enough’.

The NFU said it would like to see the GCA’s remit extended further up the supply chain to cover primary producers.

The union’s food chain adviser Tom Lander said: “This will help to drive out unfair trading practices throughout the supply chain, from farm gate through to retailers and food service companies.

Only when the adjudicator’s remit has been extended can a fairer food chain for all be achieved.”

It comes after Scottish MEP Alyn Smith reiterated calls for an investigation into the supply chain and the creation of tougher regulations.

Mr Smith, who sits on the European Parliament’s Agriculture Committee, criticised newly-released guidance from the GCA, including details on the process of being de-listed by a supermarket. De-listing is used by supermarkets to drive prices down by threatening to no longer buy a supplier’s product.

He said the adjudicator’s guidance did not protect farmers because it did not address how supermarkets could, simply through the threat of de-listing suppliers, affect the market price.

Mr Smith added the adjudicator had failed to produce a set of rigorous rules to protect suppliers, as they were ‘poorly defined’ and ‘in need of clarification’.

It comes after Premier Foods announced it was ‘simplifying’ its controversial practice of asking suppliers for payments to continue doing business with the firm.

Premier Foods said the arrangement had been ‘misunderstood and misinterpreted’ and it was reverting to a more ‘conventional’ scheme.

“We need to overhaul the legal framework of the food supply chain,” said Mr Smith.

“For example, Premier Foods forcing suppliers to pay for the privilege of doing business with the firm was entirely legal because, while the UK Groceries Code states suppliers should not have to pay a listing fee except in relation to a promotion or a new product, Premier Foods is technically a manufacturer, not a supermarket.

“These loopholes created by the vagueness of the rules are causing major problems and we need clarity and rigour from a potent regulator. This is precisely the opposite of what the GCA is and has been providing.”

The GCA has been criticised for doing little to correct the imbalances in the market.

However, a GCA spokesman said suppliers were reporting improvements and added de-listing guidance ‘makes clear what it is for’.

• The first review of the GCA will take place in March next year