ACS welcomes new supermarket adjudicator

The ACS (Association of Convenience Stores) has welcomed Government plans to introduce a Grocery Code Adjudicator (GCA) to oversee the relationship between supermarkets and suppliers from as early as next year.

In an announcement made today, Ministers have confirmed a departure from the Grocery Ombudsman proposed by the Competition Commission in 2008. The new GCA will be created within the existing Office of Fair Trading, although with separate decision making. The remit of the GCA will be to:

  • Oversee compliance with the Code of Practice in place since February 2009
  • Receive complaints (on an anonymous basis if necessary) from suppliers
  • Act on complaints from businesses directly affected by harmful practice
  • Act on ‘other information in the public domain based on evidence’

The GCA will not have the power to raise fines, the main sanction will be ‘name and shame;’ but provision will be introduced in legislation to allow for fine raising powers to be imposed in the future if necessary. The GCA will be funded by the retailers and the Government will reflect further on the fairest mechanism

Government is now seeking approval from the Parliamentary Business and Legislation Committee to publish a draft Bill later this year with the intention of bringing forward a Bill in the second Session.

ACS chief executive James Lowman said: “We welcome the Grocery Code Adjudicator as a pro-competitive step that will prevent the worst abuses of buyer power in a market place that is so consolidated that it presents a real risk to consumer interests. We need the Government to move quickly now; it has been 10 years since the authorities first identified the risks presented by abusive practices.

“ACS has worked constructively for the past few years with the Government and the competition authorities to ensure that the importance of an effective regulator is understood. We are pleased that the Government have listened to our arguments that evidence from sources other than suppliers should be taken into account by the GCA, and that suppliers should be able to make complaints on an anonymous basis. These represent significant progress for those who want to see a fairer grocery market.

“Ministers have taken the decision to depart from the exact model provided by the Competition Commission and we will be scrutinising the GCA to ensure that it is effective in stopping the harms practices identified in the Grocery Market Inquiry.”