The OFT’s conclusion of its probe into the code of practice has left suppliers and independents frustrated. Rod Addy reports

Leaving aside the cries of ‘whitewash’ levelled against the OFT from some quarters, manufacturers and independents will have to come to terms with the report whether they like it or not. And like it they don’t. On the one hand, suppliers are unhappy with the document’s comments on the code of practice. On the other hand, its assessment of wider competition issues regarding the composition of the food and drink retail market have alienated independents.
So far, suppliers have been reluctant to go public with their disapproval of the aspects relating to the code following the OFT’s sweeping conclusion this week that there was no evidence it was not working. But speaking privately to The Grocer, one said he believed nothing would begin to change until the OFT allowed anonymous submissions. “I would like to see a system set up whereby suppliers were allowed to give evidence in confidence. Instead of one complaint, the OFT would have thousands. Then we would be able to form legislation to meet the problem.”
The NFU, which represents primary producers, has welcomed the OFT’s commitment to work with supermarkets to ensure written records of all negotiations are kept. And it believes the OFT’s promise to monitor the code’s compliance procedures more regularly is a step in the right direction.Beyond that, the NFU sees tighter written agreements governing overall supply chain relationships as the way forward. The OFT welcomed the NFU’s moves to develop a Buyers’ Charter supervising trade between suppliers and buyers in its earlier report on the code of practice in March. The NFU says it will press on with this scheme. In addition, it is promising to step up its mediating role. “The NFU stands ready to help facilitate meetings between suppliers and the OFT,” says deputy president Peter Kendall.
On the retail side, the anger and disappointment felt by independents is palpable. But the fact that the result was
expected means their plans for the next step are already firmly under way.
Many are pinning their hopes on the efforts of the All Party Small Shops Group, which represents the interests of independents. A spokesman said it was two weeks away from concluding its own preliminary enquiry into the effectiveness of current competition rules. It has received responses from 40-50 retailers so far, he said, adding that although it was difficult to say what the conclusions would be at this stage, common themes were emerging.
Topping the list were protests surrounding the OFT’s breakdown of the grocery market into supermarkets, mid-size stores and convenience outlets. Other retailers have rallied against the below-cost selling tactics of the supermarkets. The spokesman said it would be inviting retailers to supply further, oral evidence after responses had been compiled. MPs on its committee would then be briefed to lobby from October.
Support for the campaign has been strong from the ACS. James Lowman, spokesman for the group, said that the best course of action was national and regional lobbying campaigns. “Retailers who are unhappy with the OFT’s decision can write to trade minister Gerry Sutcliffe. They can also write to their local MP, encouraging them to take part in the All Party Small Shops Group,” he said.
The FWD agreed the group would spearhead the independents’ campaign. DG John Murphy added the OFT had indicated there were other channels that could be pursued.
“Defra, the Office of the Deputy Prime Minister and the DTI will have to be involved at some point,” he said.
For now, though, suppliers and retailers will have to go back to the drawing board, says John Markham, competition specialist at Cameron McKenna. “It was hoped the report would lead to a market investigation immediately. The OFT has ruled that out for the time being, saying any evidence it now receives would have to be ‘fresh and compelling’, so it’s back to square one.”