Sir, Each week sees new stories of the strain that Brexit is placing on the food sector. Confusion about the future of trade, regulation and the labour market compounds the vulnerability of the many farmers and small food businesses that sell indirectly to supermarkets.
Indirect suppliers are outside the remit of the Groceries Code Adjudicator and are exposed to unfair trading practices that already make it difficult to plan, invest and compete.
At times of uncertainty such as these, many large food retailers and manufacturers react by transferring risk and costs to their suppliers, which can mean bankruptcy for otherwise viable, well-run businesses. By defining and policing ‘unfair dealing’, the GCA has improved the trading situation of direct suppliers to supermarkets.
The government is currently reviewing the role of the GCA, and should take this opportunity to extend its powers to cover indirect suppliers, giving certainty to the supply chain by stamping out unfair practices. This certainty would be welcome for farmers and small businesses faced with navigating Brexit.
This solution has been presented as unworkably complex. But the UK has experience of regulating large and complex sectors such as finance and utilities. And the GCA already regulates the purchasing of the 10 major supermarkets.
The office is a success not because it runs the rule over every transaction or contract, but because the GCA listens to the industry, prioritises pressing issues, and commands respect because of its power to fine. There is no reason why an extended Adjudicator could not adapt this strategic approach to suit a wider remit.
Brexit has highlighted the importance of our food sector, but also its vulnerability. An extended GCA is urgently needed to ensure that the whole of the supply chain operates in a sustainable way.
Thomas Wills, policy officer, Traidcraft Exchange