Jo Swinson ensures fair treatment for supermarket suppliers

It’s a key liberal principle that large, powerful organisations whether government or private companies, should not be allowed to abuse that power, to treat those they deal with unfairly.

That’s why the Liberal Democrats have been so keen to set up a Groceries Adjudicator to ensure that the large supermarkets give a fair deal to their suppliers. The Adjudicator will have the power to arbitrate between retailers and suppliers, and investigate complaints from direct and indirect suppliers and third parties. Crucially,  Liberal Democrat minister Jo Swinson  has ensured that the Adjudicator will have more power to enforce the Groceries Code, including fining supermarkets who don’t comply. She said:

The food industry plays an important role in economic growth, and the Groceries Code Adjudicator will help to ensure that the market is operating in a fair and healthy way. Large supermarkets form a big chunk of this industry, and generally provide consumers with low prices and variety whilst providing business for farmers and suppliers.

But where supermarkets are breaking the rules with suppliers and treating them unfairly, the Adjudicator will make sure that they are held to account. We have heard the views of the stakeholders who were keen to give the Adjudicator a power to fine, and recognise that this change would give the Adjudicator more teeth to enforce the Groceries Code.

We expect fines to be used as a last resort, but the fact that the Adjudicator has the power to impose them will send a strong message to retailers that compliance with the Code is not optional. I am confident that these changes will mean that the Adjudicator is able to ensure fair play in the food supply chain and keep the industry growing.

This move has been welcomed by Ceredigion MP Mark Williams, who has championed the cause as many businesses and farmers in his constituency are affected. He said:

To create growth and jobs, Liberal Democrats in the Coalition Government are making sure that small business owners and farmers have the opportunity to get on in life, without being squeezed by all-powerful supermarkets. Liberal Democrats are working hard to create a stronger economy and that means we need to ensure everyone is treated fairly. That is why the beefed-up powers for the Grocery Code Adjudicator are an important step forward.

If you want to know more about the sorts of practices the Groceries Adjudicator is there to stop, Consumers International produced a report looking at this from an international perspective. Table 2 on Page 4 outlines a whole list retailers’ practices which adversely affect suppliers. From late payment, to changing terms and conditions as they see fit, to returning unsold goods to the supplier at the suppliers’ expense, it’s clear how these large organisations abused their power to squeeze those they bought from.

Liberal Democrat MSP Tavish Scott called on the SNP Government to take similar action in Scotland to give a level playing field across the UK. He said:

This sends a clear message to powerful supermarkets that compliance with the new adjudicator is not optional. Farmers deserve confidence that they will get the fair deal they deserve and that the adjudicator will have teeth.

I will be encouraging Scottish Ministers to set out how they plan to work with the new body to ensure a fair and consistent approach to the food supply chain throughout the UK.

* Caron Lindsay is Co-Editor of Liberal Democrat Voice and blogs at Caron's Musings

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3 Comments

  • Kirsten de Keyser 6th Dec '12 - 9:52am

    So, you’re a small supplier getting rooked by the large supermarket chain.
    You complain to the adjudicator, who wades in and fines the large supermarket chain.
    When will you get your next order from the large supermarket chain I wonder?
    Is that how it works or are the ‘teeth’ of the real variety which includes random checks by the adjudicator and protected anonymity for whistleblowers?

  • Richard Swales 7th Dec '12 - 10:58am

    In practice foreign suppliers won’t take advantage of this even if they are covered by it. So supermarkets will be able to choose a contract-based relationship with a foreign supplier with fixed and predictable costs, or a regulator-based relationship with a British supplier with unpredicatable costs defined by a distant Kommisar after the fact.

    If I was launching a new food product in the UK right now, articles like this saying the government wasn’t going to let me offer sale or return to potential retail partners would make my blood run cold.

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