However, having campaigned for greater regulation of supermarkets’ buying power since the Competition Commission first reported abuse of power by supermarkets ten years ago, the charity is concerned that suppliers must wait until at least 2012 for the Adjudicator to be established and that the penalty regime that the Adjudicator can use will be insufficient.
Traidcraft’s director of policy, Paul Spray, said: “Supermarkets benefit from the labour and entrepreneurship of farmers in developing countries and it is only fair that farmers should receive fair terms of trade.
“The government’s suggestion that possibly damaging an offending supermarket’s reputation will be a sufficient deterrent to improve supplier relationships is naive. The Adjudicator must have the power to apply financial penalties from day one – then all supermarkets will see that there is a level playing field and they will gain no advantage by pressurising their suppliers.
“We urge the government to give the establishment of the Adjudicator greater priority so that an Adjudicator can finally begin to stem unfair practices and help the grocery sector return to being a fair market.”
Fiona Gooch, Traidcraft’s senior policy adviser, added: “As food security becomes an increasing important issue, and supermarkets’ practices continue to hinder suppliers’ ability to plan – the government needs to prioritise the establishment of the GCA into the first parliamentary session.
“It’s widely known that supermarket suppliers operate in a culture of fear – afraid to speak out against abusive practices by supermarkets. So, it’s good to see that complaints will be kept anonymous but for real effectiveness the Adjudicator must have the power to initiate an investigation on the basis of credible intelligence.”
The news of the Groceries Code Adjudicator will also be welcomed by consumers as 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 adjudicator 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 adjudicator and the benefits to shoppers would significantly outweigh these negligible costs.
