All four major multiples have told The Grocer they promise to get more details of their deals with suppliers down in writing, amid recriminations that the latest OFT review into the supermarkets code of practice, published this week, was a “whitewash”.
In the follow up to its March report - and after receiving 29 further submissions - the OFT ruled there was still no evidence supermarkets were dealing unfairly with suppliers, mainly because not one complaint had been submitted under the dispute provisions of the code.
Sir John Vickers, chairman of the OFT, said: “Natural justice and common sense do not allow regulatory intervention in markets without proper evidence.” The OFT report into ‘wider competition issues’ also confirmed there would be no let up in the decision to view supermarkets and c-stores as two separate markets. However, the OFT insisted the current code of practice could be “enhanced by greater use of written records of supermarket-supplier dealings”.
Jonathan Church, Tesco’s external communications manager, said: “If suppliers request written terms then we will give them to them.”
Asda said that standard terms and conditions were already provided to all suppliers, even if only on e-mail due to the “fast-moving” pace of retailing.
Morrisons, which volunteered to abide by the code following its acquistion of Safeway, said: “We welcome the OFT’s commitment to improving the code’s practical usefulness and will be supporting it in facilitating the suggested enhancements.”
Sainsbury’s spokeswoman Cheryl Kuczynski said the chain would be working with the OFT to “sort out the practicalities and the detail” of the suggestion.
However, suppliers and trade bodies greeted the idea of greater paper trails with mixed emotions. A spokeswoman for the Food and Drink Federation said: “We would like to know what the OFT means by better written agreements and will be looking for further details.”
Aidan Bocci, chief executive of Commercial Advantage, said larger manufacturers had the most to gain from written agreements. “This is a chance for suppliers to grab some of the balance of power back but there is nothing in it for retailers.”
John Markham, competition specialist at law firm Cameron McKenna, said written contracts would provide more protection for suppliers but retailers could be expected to negotiate even harder. He added: “Suppliers would have to look hard at the individual terms.”
>>p24 Opinion, p29 Analysis
Simon Mowbray
In the follow up to its March report - and after receiving 29 further submissions - the OFT ruled there was still no evidence supermarkets were dealing unfairly with suppliers, mainly because not one complaint had been submitted under the dispute provisions of the code.
Sir John Vickers, chairman of the OFT, said: “Natural justice and common sense do not allow regulatory intervention in markets without proper evidence.” The OFT report into ‘wider competition issues’ also confirmed there would be no let up in the decision to view supermarkets and c-stores as two separate markets. However, the OFT insisted the current code of practice could be “enhanced by greater use of written records of supermarket-supplier dealings”.
Jonathan Church, Tesco’s external communications manager, said: “If suppliers request written terms then we will give them to them.”
Asda said that standard terms and conditions were already provided to all suppliers, even if only on e-mail due to the “fast-moving” pace of retailing.
Morrisons, which volunteered to abide by the code following its acquistion of Safeway, said: “We welcome the OFT’s commitment to improving the code’s practical usefulness and will be supporting it in facilitating the suggested enhancements.”
Sainsbury’s spokeswoman Cheryl Kuczynski said the chain would be working with the OFT to “sort out the practicalities and the detail” of the suggestion.
However, suppliers and trade bodies greeted the idea of greater paper trails with mixed emotions. A spokeswoman for the Food and Drink Federation said: “We would like to know what the OFT means by better written agreements and will be looking for further details.”
Aidan Bocci, chief executive of Commercial Advantage, said larger manufacturers had the most to gain from written agreements. “This is a chance for suppliers to grab some of the balance of power back but there is nothing in it for retailers.”
John Markham, competition specialist at law firm Cameron McKenna, said written contracts would provide more protection for suppliers but retailers could be expected to negotiate even harder. He added: “Suppliers would have to look hard at the individual terms.”
>>p24 Opinion, p29 Analysis
Simon Mowbray
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