The government is considering plans to scrap the Groceries Code Adjudicator and merge its functions with the Competition & Markets Authority.
A consultation launched by small business minister Jane Hunt this week said ministers were looking at whether they could make efficiency savings by doing away with the role, which was established in 2013 with the appointment of Christine Tacon.
Current Adjudicator Mark White, who took over the role last year, now oversees 14 of the UK’s leading food retailers, with Amazon the most recent to be added to the list in March. A YouGov survey in June found relations between retailers and suppliers were worsening for the first time under the Adjudicator, because of the wave of cost price increase requests from suppliers.
Supplier groups told The Grocer they believed it would be a huge blow if the CMA took over the GCA’s powers, with food & drink companies’ complaints likely to be buried among other issues the watchdog considers, such as takeovers.
It is not the first time the government has considered ditching the Adjudicator, with a similar review in 2016 finding no evidence it would increase the effectiveness of public functions or accountability to ministers.
Announcing the review, Hunt said: “In light of the need to ensure efficiency of public bodies, we would like to consider those questions again in the current review.
“The government has not made any decisions about a possible transfer but would be particularly interested in whether there might be gains in efficiency and effectiveness in transferring the GCA functions to the CMA.”
The move comes despite the GCA being funded by a levy imposed on retailers under his jurisdiction, all of whom have turnover of more than £1bn a year.
White told The Grocer last month that the “avalanche” of requests for price hikes by suppliers had resulted in a significant worsening of relationships between supermarkets and suppliers. The Adjudicator is understood to be involved in a series of arbitration processes, the stage before an official investigation is launched.
Tacon carried out two investigations in her time at the helm, including a 2014 probe into Tesco that was seen as a landmark in rooting out unfair retailer practices.
John Noble, director of the British Brands Group, said it was vital suppliers rallied against moves to get rid of the position.
“This is a crucial consultation for grocery suppliers and they should seriously consider answering the 13 questions posed,” he said.
“It will shape the next three years of GSCOP. Of particular note is the suggestion that monitoring and enforcing GSCOP might move from the GCA to the CMA. The CMA has many priorities while the GCA has a single focus on the Code. That is a significant difference with big implications.”
Ged Futter, founder of The Retail Mind, said: “It’s utter madness to consider scrapping the GCA and just shows the government hasn’t a clue.
“Cutting costs from the GCA’s office is not going to save a penny for a single customer in any part of their life.
“All it does is put it at risk because we know what it was like before the Adjudicator came round.
“It was the wild west out there. If the government wants to return to the wild west then scrapping the Adjucator is the way to do it.”