To fine or not to fine? It’s the debate that has raged all week over the power, of lack of it, which will be afforded to the incoming Groceries Code Adjudicator.
The GCA Bill had its second reading this week, and the major sticking point remains fines. MPs queued up to insist the Adjudicator is given the power to fine offenders. And it seems like a reasonable demand.
Why shouldn’t supermarkets be hit with whopping great fines if the anecdotal tales of the way suppliers have been treated by them are true?
Tactics like Jo Swinson MP, who is charged with appointing the Adjudicator, highlighted in the debate this week, such as “transferring excessive risks and costs to suppliers” and the “retrospective varying of supply agreements to force suppliers to take on unexpected extra costs”.
Conservative MP Mark Spencer was more explicit, describing “shocking” tactics like “rejecting loads of products when the price of the market goes through the roof, when there is oversupply, or when the weather changes, as in the case of the strawberry industry.”
He also referred to what he described as “the worst practice of backdating”.
“A primary producer can supply a supermarket for two years then suddenly say to that producer, ‘By the way, we’re backdating the price of all the products you’ve supplied to us for the past 12 months, and you owe us £50,000.’ That primary producer is then faced with the prospect of either finding that money from somewhere, borrowing it or taking it out of their bank account, or reneging on the contract and never being dealt with again. That truly is an abuse of power. I hope the grocery ombudsman will be able to stop such practices.”
Many argue to do so, the Adjudicator will need to dole out a heavy fine, rather than rely on naming and shaming tactics. But the power to fine does exist in the legislation, held in reserve if needed. Read The Grocer this weekend to find out from Swinson why she thinks that is the best place for it - and why it can be bought out of reserve if the Adjudicator decides it is necessary.
Either way, in a sense, offenders run the risk of being fined anyway. It’s not cheap to buy display ads in the national press. And while it may not be the most powerful deterrent in the world, no supermarket will fancy making such a public mea culpa. And it’s got to be more embarrassing than quietly writing a cheque.
In the meantime, the saga continues. Next up for the GCA Bill is the committee stage, where more debate will take place, fuelled by frantic lobbying by both sides. Should fines be introduced? Or shouldn’t they? And we haven’t even touched on anonymity.
The Adjudicator is expected to be appointed in early December, and the latest target for the Bill to pass into law is mid-2013. It’s been an epic! But there is, finally, light at the end of the tunnel.