Those calling for the Groceries Code Adjudicator to have greater authority suffered a major blow this week after it emerged it would take years for Christine Tacon’s remit to be extended.
Prime Minister David Cameron said in January that the government planned to look at ways in which Tacon’s authority could be extended to cover indirect suppliers. His comments came in the wake of strong pressure from MPs and dairy farmers.
However, this week the Competition and Markets Authority (CMA) revealed that any such plans would require it to launch a fresh investigation into the grocery sector, or for the Conservative government, which has pledged to reduce red tape, to launch primary legislation.
Bob MacDowall, manager of the remedies monitoring team at the CMA, told the GCA conference that either “a fresh CMA investigation” or “primary legislation” from government would be required to extend Tacon’s powers.
Sources close to the issue have told The Grocer that both scenarios are extremely unlikely, with the original inquiry by the then Competition Commission becoming the subject of a prolonged battle between regulators and the industry.
“I think there would be a huge collective groan if the CMA announced another inquiry into the grocery sector,” said one source.
“Never say never,” said one government source. “But the original inquiry was a long haul and even if, and I stress it is a big if, the CMA was minded to launch a new inquiry this could take a very long time and could ultimately still require government legislation.”
“This is certainly not a case of Christine Tacon just being able to decide that she would like to extend her remit. Anyway she has made it clear that she think she has enough work on her hands as it is.”
MPs have no power to force a CMA probe, although insiders said that it would become more likely if the issue attracted continued scrutiny in the media and in parliament.
“I think the prospect of primary regulation under a Conservative government is even more unlikely,” added another source.
“This is a real blow for those who hope the government will extend the adjudicator’s powers,” said one industry leader. “I think it both makes it much more unlikely and means that even if it did happen it would take years.”
In January, Cameron told the Commons: “There is more we can do in terms of leading exports for British food producers—I know the Secretary of State is very keen on that.
“Specifically on the Groceries Code Adjudicator, something we have established, it is time to make sure that that organisation has the power, if necessary, to levy fines so that it can get its will obeyed.
”I also think it is time to look at whether there are ways in which its remit can be extended to make sure it looks at more of this vital industry.”
MacDowall also revealed that a CMA probe into whether supermarkets have written supply agreements with their suppliers as required by the original Competition Commission would begin after Tacon’s investigation into Tesco, which is expected to report in September.
A spokeswoman for the Department of Health said that it had made tackling obesity a “major priority”.
“We’ve worked with industry to cut calories and sugar in food, made labelling clearer and banned the advertising of unhealthy foods during children’s television programmes,” she said. “But we want to go further and are working on our strategy to reduce childhood obesity.”
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