Six months after the supermarket code of practice came into force and it's all quiet on the western front. There have been no complaints and no mediations. So what should we make of this deathly silence? Do we assume a triumph of governmental intervention to improve the lot of downtrodden farmers and suppliers, or is it spectacular proof that no one's taken a blind bit of notice?
Of course, a lack of official complaints doesn't prove the code is a waste of time. Any supplier who gets to the point of going public with a dispute has already committed commercial suicide. The real question is, has the code changed the way the big four do business?
According to suppliers we contacted, the answer is a resounding no.
"When [the code of practice] came in, we had a quick read, put it in the filing cabinet and said to each other 'business as usual'," says an account manager at a major own label supplier. "As it stands, it's a complete irrelevance."
The problem, according to one branded goods manufacturer, is that the code doesn't actually ban anything, it simply identifies areas of concern, such as changing terms at short notice or expecting suppliers to stump up cash to cover retailers' costs. And it stipulates that both sides should behave "reasonably" and write everything down.
If you are a small supplier negotiating with a retailer with more than 15% of the market, you can bet it's not you who defines what is "reasonable", points out one manufacturing source. "If you don't like it, you can lump it."
Claims that the code has heralded a period of greater transparency and accountability were dismissed as laughable. "You can't get buyers to confirm anything in writing or on e-mail, and when they ask you for money, for artwork, or loss of profit, it's not via a signed contract," points out a non food supplier. "If you say no, as we did recently, you risk losing business as a result. Is that reasonable?"
Take clause 17, he adds: A supermarket shall fully compensate a supplier for any cost incurred by that supplier as a result of a forecasting error attributable to that supermarket ... unless that supermarket has prepared those forecasts in good faith and with due care. "How many forecasts do you know that aren't prepared 'in good faith'?"
A code urging everyone to be fair is not going to change the way people do business, says one sales director: "Put it this way, you wouldn't walk into a buyer's office waving a copy. I suppose it could be referred to if a buyer oversteps the mark - but it doesn't give you any real leverage in negotiations. It won't make them pay their accounts on time."
The authors of the Competition Commission report agreed that a whole raft of tactics routinely employed by buyers "adversely affect the competitiveness of some of their suppliers and distort competition in the supply of groceries between suppliers".
More importantly, commissioners were in no doubt that practices such as persistent below cost selling on KVIs such as milk and bread clearly acted against the public interest.
Yet no remedial action was recommended. The "most effective way of addressing these adverse effects", it concluded, was a code of conduct.
The net result has been a document almost universally dismissed as a complete waste of time. But is it doomed to failure, or can it be salvaged?
Food and farming commission chairman Sir Don Curry says whingeing about the toothlessness of the code is not going to help anyone. If people are not happy, he argues, they should tell the OFT - which has been tasked with monitoring the code's effectiveness ahead of a review - and get it changed.
But much of the supply base remains deeply cynical about the entire enterprise. As one commercial director comments: "Mine went straight in the dustbin. Unless you legislate to ban below cost selling, or listing fees, or retrospective reductions to supplier payments, nothing will change."
Of course, a lack of official complaints doesn't prove the code is a waste of time. Any supplier who gets to the point of going public with a dispute has already committed commercial suicide. The real question is, has the code changed the way the big four do business?
According to suppliers we contacted, the answer is a resounding no.
"When [the code of practice] came in, we had a quick read, put it in the filing cabinet and said to each other 'business as usual'," says an account manager at a major own label supplier. "As it stands, it's a complete irrelevance."
The problem, according to one branded goods manufacturer, is that the code doesn't actually ban anything, it simply identifies areas of concern, such as changing terms at short notice or expecting suppliers to stump up cash to cover retailers' costs. And it stipulates that both sides should behave "reasonably" and write everything down.
If you are a small supplier negotiating with a retailer with more than 15% of the market, you can bet it's not you who defines what is "reasonable", points out one manufacturing source. "If you don't like it, you can lump it."
Claims that the code has heralded a period of greater transparency and accountability were dismissed as laughable. "You can't get buyers to confirm anything in writing or on e-mail, and when they ask you for money, for artwork, or loss of profit, it's not via a signed contract," points out a non food supplier. "If you say no, as we did recently, you risk losing business as a result. Is that reasonable?"
Take clause 17, he adds: A supermarket shall fully compensate a supplier for any cost incurred by that supplier as a result of a forecasting error attributable to that supermarket ... unless that supermarket has prepared those forecasts in good faith and with due care. "How many forecasts do you know that aren't prepared 'in good faith'?"
A code urging everyone to be fair is not going to change the way people do business, says one sales director: "Put it this way, you wouldn't walk into a buyer's office waving a copy. I suppose it could be referred to if a buyer oversteps the mark - but it doesn't give you any real leverage in negotiations. It won't make them pay their accounts on time."
The authors of the Competition Commission report agreed that a whole raft of tactics routinely employed by buyers "adversely affect the competitiveness of some of their suppliers and distort competition in the supply of groceries between suppliers".
More importantly, commissioners were in no doubt that practices such as persistent below cost selling on KVIs such as milk and bread clearly acted against the public interest.
Yet no remedial action was recommended. The "most effective way of addressing these adverse effects", it concluded, was a code of conduct.
The net result has been a document almost universally dismissed as a complete waste of time. But is it doomed to failure, or can it be salvaged?
Food and farming commission chairman Sir Don Curry says whingeing about the toothlessness of the code is not going to help anyone. If people are not happy, he argues, they should tell the OFT - which has been tasked with monitoring the code's effectiveness ahead of a review - and get it changed.
But much of the supply base remains deeply cynical about the entire enterprise. As one commercial director comments: "Mine went straight in the dustbin. Unless you legislate to ban below cost selling, or listing fees, or retrospective reductions to supplier payments, nothing will change."
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