A supermarket ombudsman will become a reality after the government today accepted the Competition Commission’s recommendation for a watchdog to oversee the new supply code of practice.

“Free and fair competition is the key to a healthy market and it is right that there should be an enforcement body to make sure consumers are getting the best value for money,” said consumer minister Kevin Brennan.

“We do not anticipate a significant impact on consumer prices or workers.”

With the new supply code due to kick in next month, a consultation will now determine the scope of the ombudsman’s role and powers.

Suppliers welcomed the news, which comes after the Conservative party last week threw its weight behind the plans.

“[The new code] will be of particular help for smaller businesses in the food chain,” said Melanie Leech of the Food & Drink Federation. “We look forward to working with the government to ensure this new organisation operates as an effective, low-cost monitoring and enforcement body.”

But the British Retail Consortium warned that UK shoppers would pay the price for the introduction of a “costly new bureaucracy”.

“This would tip the balance of negotiating power in favour of multinational food manufacturers, allowing them to drive up the prices customers pay,” said the BRC’s Stephen Robertson.

“The UK grocery market is worth £130bn a year. If threats of involving an ombudsman allow big food companies to squeeze even 0.1% more out of supermarkets, that’s £130m extra on customers’ bills.”

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