The Groceries Code Adjudicator will have the direct power to fine, after the government bowed to pressure from MPs and introduced an amendment to the bill.
Competition minister Jo Swinson said the government had listened to the concerns from stakeholders to give the Adjudicator more teeth to protect suppliers from unfair treatment.
If the Adjudicator finds that retailers are breaching the Grocery Supply Code of Practice (GSCOP) and treating their suppliers unlawfully or unfairly, he or she will be able to apply a range of sanctions. In most cases, this would consist of recommendations or ‘naming and shaming’ but, if the breach is serious enough, the Adjudicator will have an immediate power to fine the retailer.
“The food industry plays an important role in economic growth, and the Groceries Code Adjudicator will help to ensure that the market is operating in a fair and healthy way,” said Swinson. “Large supermarkets form a big chunk of this industry, and generally provide consumers with low prices and variety whilst providing business for farmers and suppliers.
“But where supermarkets are breaking the rules with suppliers and treating them unfairly, the Adjudicator will make sure that they are held to account. We have heard the views of the stakeholders who were keen to give the Adjudicator a power to fine, and recognise that this change would give the Adjudicator more teeth to enforce the Groceries Code.
“We expect fines to be used as a last resort, but the fact that the Adjudicator has the power to impose them will send a strong message to retailers that compliance with the Code is not optional. I am confident that these changes will mean that the Adjudicator is able to ensure fair play in the food supply chain and keep the industry growing.”
The Adjudicator will publish guidance within six months after the Bill comes into effect to propose the maximum amount he or she will be able to fine. Retailers will have a full right of appeal against any fines imposed.