In January, the Government announced that it will embark on a consultation to consider the nature and role of a supermarket ombudsman. But with the consultation due to take 12 weeks, it is unlikely that suppliers will be able to raise their grievances until late 2010, more than two years after the Competition Commission confirmed that an ombudsman was urgently needed.
A voluntary code for supermarkets has been shown to be ineffective; the final report from the Competition Commission on the Groceries Market Investigation reveals that in 2006 – five years after the adoption of the 2001 Supermarket Code of Practice – instances of poor practices by supermarkets actually increased by over 30%.
Fiona Gooch, Traidcraft's senior policy advisor, said: "The Government's recognition that the power wielded by large grocery retailers puts pressure on small producers is a welcome development. And it means that there may finally be an end to small farmers in the developing world facing excessive risks caused by decisions made by our own grocery sector.
"But until there is a watchdog in place, the strengthened code of practice is in danger of being futile. A speedy and unequivocal consultation is needed so that a supermarket ombudsman can begin to stem unfair practices and help the grocery sector return to being a fair market as soon as possible."
A survey by Traidcraft showed that eight in ten shoppers wanted a watchdog to monitor and penalise supermarkets which treat suppliers unfairly.
Industry accusations that the cost of the watchdog would lead to rising food prices were disputed in an independent report by economist Professor Roger Clarke who found that retailers would each pay just 0.005% of their turnover to fund the ombudsman and the benefits to shoppers would outweigh these costs.
