Politicians debate Grocery Code Adjudicator

The government has said that it would be “unecessarily adverisarial” to allow the Grocery Code Adjudicator (GCA) to fine retailers for breeches of supplier and producer contracts, as the bill had its second reading in the House of Commons yesterday (19 November).

Although politicians called for the GCA to be strengthened and for fines to be available from the start, the government argued that its proposed powers would be “robust and sufficient” to deal with problems between suppliers and the retailers. The Parliamentary Under-Secretary of State for Business, Innovation and Skills, Jo Swinson said that it would benefit no one to reach straight for fines before other options had been exhausted.

She said: “We seek to impose a proportionate and effective solution. A move straight to fines would risk creating an unnecessarily adversarial environment, which would ultimately detract from our key objective of achieving long-lasting change in the culture of retailers.”

Swinson argued that the ‘name and shame’ sanctions against offending retailers would be sufficient to achieve necessary changes as supermarkets are “rightly, very careful about their reputations”, adding: “I believe that the threat to supermarkets of recommendations and requirements to publish details will be enough to drive cultural change.”

She said it was “important to remember that the bill allows the adjudicator to take more than one measure if that is appropriate in a particular case”, arguing that even without fines, there would be financial consequences for retailers who breach the code. The government has already accepted a number of changes, including a provision to ensure that retailers who cause the adjudicator the most trouble should pay a greater share of the levy.

“Taken together, those factors will reward good behaviour and discourage non-compliance,” she said.

However, she conceded that if the Secretary of State decides that financial penalties do need to be introduced, this could be done within six months. She said: “It would be fairly rapid if it was determined that things were not working.”

Agriculture minister David Heath confirmed that there would be no restrictions on who can complain to the adjudicator as there was a genuine concern about a climate of fear among some suppliers, and that the scheme would be funded by a levy on the ten largest retailers (Asda, the Co-operative Group, Marks and Spencer, Morrison’s, Sainsbury’s, Tesco, Waitrose, Aldi, Iceland UK and Lidl UK).

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