Politicians and pressure groups in the UK are joining forces to push for the creation of a watchdog to protect suppliers from supermarkets set on “abusing their power”.
Go deeper with GlobalData
Groups backing the call range from the National Farmers’ Union of England and Wales (NFU) to the Association of Convenience Stores and Friends of the Earth.
The coalition, dubbed the Cross Cutting group, has tabled a submission to the ongoing government inquiry into the UK grocery sector.
In a statement to the Competition Commission’s inquiry into supermarkets, the Cross Cutting group called for the appointment of a proactive supermarket ‘adjudicator’ to investigate and stamp out the abuse of supermarket power.
In a separate submission, the group also called for changes to the planning system to encourage diversity to prevent the major supermarkets from dominating local areas.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“This is about ensuring fair trade in the food industry,” said James Withers, deputy chief executive of NFU Scotland. “Supermarkets are farmers’ biggest customers, selling about three-quarters of all the produce that leaves the farm gate. Therefore, we have to work with them, but we simply can’t afford to do so at any price.”
Withers added that there was a “culture of fear” in the food industry and that exploitation was a “taboo subject”, with suppliers too afraid to speak out when they felt that supermarkets had abused their power.
“All we want is a check in the system; a watchdog to ensure that suppliers are treated ethically,” he said. “The Supermarket Code was a laudable idea when it was introduced four years ago. But it has failed to have any effect because there is no proactive enforcement and suppliers are afraid to complain. The result is that the Code sits on a shelf gathering dust, while supermarkets become more powerful and, it would appear in too many cases, more willing to abuse that power.”
The Competition Commission is in the middle of a 15-month inquiry into the UK supermarket sector. It is due to publish its provisional findings in September with a final report expected in February 2008.
Andrew George, Liberal Democrat MP for St Ives, added: “I am not suggesting supermarkets are inherently wicked, but regulators need to make a judgment on when influence in the marketplace alters from successful use of market power to unacceptable abuse.”
