>>what has the code of practice review achieved?
If a picture speaks a thousand words then I hope you will agree that the one we have used to illustrate our feature on the OFT and its wretched supermarkets code of practice speaks volumes. As you will see on page 31, we have pictured the four big chains being crushed under the combined weight of two Competition Commission reports, the Farming and Food Commission report and the newly-released review of the OFT code. Together, these various documents add up to something like four years’ worth of work, thousands of words and many millions of pounds.
And to what end? Well, as far as the code of practice is concerned, very little indeed.
When the Competition Commission published its weighty report into the supermarkets sector in October 2000, it found that a great many suppliers felt the relationships they had with their biggest customers were unbalanced. Cue the code of practice. Sadly, too many suppliers say not much has changed since then; some even think things have got worse. In a competitive industry like ours, with power consolidating into the hands of fewer retailers, there will always be tension at the interface between buyer and seller. But tough negotiation is not the same as unethical trading. What worries me is the evidence - albeit largely anecdotal - that too much of the latter is going on.
As the OFT acknowledges, the fact no supplier has used the code to lodge a complaint is due to their understandable reluctance to blow the whistle on a major customer and is not a sign that there is nothing for suppliers to complain about. Our story on page six suggests a significant number of suppliers think buyers are either breaching the code or coming pretty close.
Nevertheless, do we really need another OFT probe? Will this new ‘compliance audit’ unearth anything? Or will it prove to be just another waste of time, money and effort? I fear all we will get is another inconclusive report to read in a few months’ time. But even if that proves to be the case, retailers should not think this issue is going to go away. And after four years of investigations, and far too many inconclusive reports for my liking, isn’t it about time the supermarket industry, as a whole, took the initiative and tried to find a way of resolving this once and for all?
time to take the initiative
If a picture speaks a thousand words then I hope you will agree that the one we have used to illustrate our feature on the OFT and its wretched supermarkets code of practice speaks volumes. As you will see on page 31, we have pictured the four big chains being crushed under the combined weight of two Competition Commission reports, the Farming and Food Commission report and the newly-released review of the OFT code. Together, these various documents add up to something like four years’ worth of work, thousands of words and many millions of pounds.
And to what end? Well, as far as the code of practice is concerned, very little indeed.
When the Competition Commission published its weighty report into the supermarkets sector in October 2000, it found that a great many suppliers felt the relationships they had with their biggest customers were unbalanced. Cue the code of practice. Sadly, too many suppliers say not much has changed since then; some even think things have got worse. In a competitive industry like ours, with power consolidating into the hands of fewer retailers, there will always be tension at the interface between buyer and seller. But tough negotiation is not the same as unethical trading. What worries me is the evidence - albeit largely anecdotal - that too much of the latter is going on.
As the OFT acknowledges, the fact no supplier has used the code to lodge a complaint is due to their understandable reluctance to blow the whistle on a major customer and is not a sign that there is nothing for suppliers to complain about. Our story on page six suggests a significant number of suppliers think buyers are either breaching the code or coming pretty close.
Nevertheless, do we really need another OFT probe? Will this new ‘compliance audit’ unearth anything? Or will it prove to be just another waste of time, money and effort? I fear all we will get is another inconclusive report to read in a few months’ time. But even if that proves to be the case, retailers should not think this issue is going to go away. And after four years of investigations, and far too many inconclusive reports for my liking, isn’t it about time the supermarket industry, as a whole, took the initiative and tried to find a way of resolving this once and for all?
time to take the initiative
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