In the hubbub of last week’s ‘farm to fork’ summit, one important announcement was overshadowed. It was this, from Rishi Sunak: “The government will protect the interests of farmers by making sure they get a fair price for their produce.”
Crucially, it will ensure fair prices through the Groceries Code Adjudicator, which had previously been earmarked for a merger with the Competition & Markets Authority. The turnaround shows the government recognises the importance of the GCA in ensuring food supply chains function as they should.
Rather than being headline news, this was hidden was paragraph 28 in a series of announcements from the prime minister. And despite Sunak’s singling out farmers in his announcement, they aren’t directly protected by the code. So does it show the PM is aware of the importance of the GCA? Or does it show that this was a briefing full of spin, underpinned by a lack of awareness of what the Adjudicator covers?
To put the announcement into context, small business minister Jane Hunt last year said ministers were looking at whether they could make efficiencies by doing away with the GCA role and transferring its function to the CMA. Efficiencies typically include cost savings. Yet the GCA’s office is wholly funded by a levy imposed on the retailers covered by the code. The cost to the taxpayer is zero. If it was moved into the CMA, a public funded body, costs would ironically have gone up.
There is also the issue of expertise. Is the CMA an expert in the grocery retail sector? Will they have a better understanding than a body that is dedicated to improving the industry? Of course not.
So I can only applaud the news that the GCA’s office will remain, rather than being rolled into the CMA. When the code was introduced in 2010, some grocery retailers were behaving as if they were in the wild west. Has it been tamed? In most parts it has, though there are still some parts of the industry who believe they can operate on the fringes of the code.
It doesn’t help when overall code compliance is going backwards. In last year’s GCA survey, only three retailers stepped up their overall compliance – the others either went backwards or stood still. This year’s survey results are out next month, and a further step backwards is expected. But at least the GCA has the comfort of knowing his role isn’t changing and he can address the issue.
Then again, perhaps the role should change. The agriculture sector has been asking for the code to include non-direct suppliers – in other words, farmers – for years. And the government clearly still has a lack of understanding of the sector. As part of the summit, it announced plans to make it easier to build new glasshouses “through changes to national planning policy”. They clearly haven’t listened to those in the know: glasshouses are closing as they cannot get the prices they need to operate.
It also announced additional reviews into fairness in the horticulture and egg supply chains, in light of the impact of global challenges facing these sectors. But it’s wrong to talk about the global stage here. The reason for most of these problems lies much closer to home: it sits with how retailers are working, or not, with producers. We have a lack of eggs because of issues right here in the UK. And to address that, we need greater scrutiny of retailers.