Supplier groups have welcomed this week’s publication of a revised Groceries Supply Chain Code of Practice but said it is imperative the code has the backing of an effective ombudsman.
The amended code is contained in a draft order put out for consultation this week by the Competition Commission.
According to the Commission, the “strengthened and extended” code will result in a “major improvement to relationships between retailers and suppliers.”
Inquiry chairman Peter Freeman said the code would prohibit retrospective changes to terms and conditions and limit the extent to which suppliers are required to pay for listings, promotions, inaccurate forecasts or customer complaints.
However, commentators have questioned its likely impact without the backing of an enforcement officer in the shape of an ombudsman.
“A strengthened code will only work if it is accompanied by a robust and proactive enforcement mechanism,” said a spokesman for the National Farmers’ Union.
“The next critical step must be to put the ombudsman in place because without it the code is rendered impotent and offers no security to those it is designed to protect,” added Traidcraft senior policy advisor Fiona Gooch.
The commission said it will be consulting publicly in the next couple of weeks on the establishment of an ombudsman. However, the body does not have the power to establish an ombudsman itself and will have to gain agreement from the major retailers or refer the issue to the Government.
The commission also said this week that an order outlining measures to prevent exclusivity arrangements and restrictive covenants being used by grocery retailers would be published shortly.
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