UK to introduce Groceries Code Adjudicator (GCA)

The country’s National Farmers’ Union (NFU) welcomed the long-awaited move announced in the Queen’s Speech yesterday (9 May), saying it was “a relief for farming”, but warned that the bill needed to be improved in order to ensure its efficiency.

NFU president Peter Kendall said: “Farmers and growers will be relieved at this announcement. We now hope the government will confirm its commitment to levelling the playing field in the grocery supply chain by introducing the bill early in the new session, which starts today.​

“However, we remain concerned that government plans to include complicated and unnecessary provisions in the Bill will fetter the adjudicator’s ability to investigate unfair practices by the major supermarkets.”​

Kendall cited the fact that, in the current bill, third parties such as trade associations were not allowed to provide evidence before the beginning of an investigation, which could “seriously hinder the effectiveness of the adjudicator”​.

Meanwhile, the British Retail Consortium (BRC), which represents supermarkets, expressed concerns over the implementation of the Groceries Code Adjudicator, saying it would increase red tape for retailers, and rejected the idea of third-party complaints.

BRC food director Andrew Opie said: “It’s in retailers’ own interests to have excellent relationships with their suppliers. They depend on a successful and resilient supply chain to keep their shelves stocked with the produce consumers want to buy. ​

“The proposed adjudicator is in danger of adding to the cost and bureaucracy of running a grocery business without adding to the strong protection which already exists for suppliers. The government’s initial estimate put running costs at just £1m a year, a figure the BIS select committee said was unrealistic. The truth is no-one knows what the cost might be. Retailers are being asked to write a blank cheque.”​

Kendall said some supermarkets were taking positive steps to work constructively with their suppliers, but that more work needed to be done. “Retailers are too inclined to undo this good work by focusing on their own short-term financial performance and this all too often means abusing their position,”​ he added.

While Opie urged the government to keep the adjudicator simple and to reject third-party complaints, Kendall warned that the bill could be ineffective in its current state. “We applaud the government for sticking to its commitment to introduce an adjudicator, but warn that to introduce one without the powers to do a proper job could be counter-productive, entrenching unfair practices in the grocery supply chain even more deeply,”​ Kendall said.

He added that the bill had received great support in parliament and should therefore be up-and-running before 2013.