Farmers in line for regulatory boost
Government considering widening Groceries Code Adjudicator’s role to aid embattled rural businesses
BRITAIN’S crisis-stricken farmers could receive a major boost in their battle with the big supermarkets under plans to extend the grocery watchdog’s powers.
The Government will shortly begin a consultation to test whether the Groceries Code Adjudicator’s (GCA) role should be expanded to cover the farming industry, following calls from the National Farmers Union to govern supermarkets’ relationships with their indirect suppliers, including farmers.
Currently the GCA regulates the relationships between the major grocers and direct suppliers and has no governance over dairy or beef farms, which then may sell their goods after processing. The NFU has said that farmers would benefit from transparency, but the retail industry argues it would be unfair to include farmers when only a fraction of produce might be supplied to a supermarket.
Margot James, the new minister for small business, consumers and corporate responsibility, will launch a call for evidence in September about whether an extension should go ahead.
However, Christine Tacon, the adjudicator, cautioned two months ago that any extension of the code to include suppliers would require a “totally different scale of job” that would be impossible to fulfil under her present powers.
Ms Tacon has also raised concerns that “calls to extend my remit are… largely about price”, which the GCA has no control over as it can only scrutinise contractual relationships, not pricing, which is determined by the free market.
The GCA was set up in 2013 following a Competition Commission probe into supermarkets and is funded by the 10 biggest food retailers.
The British Retail Consortium (BRC) said that it is against an extension of the GCA’s remit. Supermarkets are unlikely to be willing to pay for a watchdog that looks beyond their sector.
Andrew Opie, director of food policy at the BRC, argued that the GCA should be focused on its code rather than “an attempt to correct all the ills in the market”.
The Government will also look into the effectiveness of the GCA since formation three years ago.
The GCA was given the power to hand out fines equivalent to 1pc of turnover last April. The watchdog attracted headlines earlier this year following its investigation into Tesco, which found the supermarket had deliberately delayed paying suppliers. However, the GCA was unable to hand down a financial penalty as it started its probe before the powers were brought in. The watchdog is now focused on a wider consultation into how supermarkets demand payments from suppliers for better product positioning.
A Government spokesman confirmed that the Business department will launch a consultation “shortly”. its