The case for extending the remit of the Groceries Code Adjudicator

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The government should take the opportunity to support the UK’s food supply chains by extending the remit of the Groceries Code Adjudicator so that it is able to tackle unfair purchasing practices.

The UK’s food system is on a precarious footing. Most suppliers producing and processing food that ends up on our supermarket shelves are vulnerable to unfair purchasing practices that can send competent businesses into bankruptcy, undermine competition and lead to a worse deal for consumers.

These practices might be buyers (often powerful supermarkets or big brands) cancelling orders at the last minute, making deductions from invoices or asking suppliers to pay unexplained fees.

Brexit means that farmers and small food businesses supplying the UK are grappling with new uncertainties. The additional business risk posed by unfair trading practices threatens the sustainability of our food supply chains.

The Groceries Code Adjudicator (GCA) is the regulator that prevents the UK’s ten biggest supermarkets purchasing unfairly from their direct suppliers, and it has made good progress in tackling the bullying behaviour of some retailers. However, its remit only covers direct suppliers to supermarkets and it cannot investigate abusive purchasing experienced by indirect suppliers. This includes many farmers and small food businesses (for example, only 10% of UK dairy farmers sell directly to supermarkets). The GCA’s remit needs to be expanded to cover the widest possible extent of the food supply chains that serve our supermarkets.

This is not a new idea. In 2008, the Competition Commission looked at groceries supply chainsand proposed the establishment of the Groceries Code Adjudicator to tackle unfair trading practices. Their report also anticipated that the GCA’s remit may be insufficient, noting that if these practices continued the government ‘should consider the introduction of appropriate measures, including the extension of … the role of the Ombudsman [GCA]’.

The Groceries Code Action Network is a group of organisations calling for exactly this solution. The network includes civil society organisations representing interests as diverse as food waste, farming, international development, agricultural sustainability, labour rights and consumers. The full list of organisations is below.

The government has completed a consultation on the GCA and is due to publish its conclusions this autumn. We hope that Margot James and George Eustice, the ministers responsible, will take this opportunity to extend the Adjudicator’s remit and provide much-needed support to hard-pressed groceries suppliers.

The following documents have been produced by the Groceries Code Action Network:

This document suggests a plausible model of operating for the extended GCA. It covers questions including what the limits of an extended remit could be, the possible legal basis for extension and how the extended regulator might be funded. This is intended as a basis for further discussion.

This companion document answers ten questions commonly posed by policy-makers and industry representatives on the case for extending the GCA.

For more information on either of these documents, or on the work of the Groceries Code Action Network, please get in contact with tom.wills@traidcraft.org

The Groceries Code Action Network includes: National Farmers Union of Scotland, British Independent Fruit Growers’ Association, Tenant Farmers Association, National Federation of Women’s Institutes, Traidcraft Exchange, Oxfam GB, Fairtrade Foundation, Sustain, The Food Foundation, Feedback, Think Global, Food Ethics Council, Bakers Food and Allied Workers Union, Friends of the Earth, Bananalink, Global Justice Now, War on Want.

Tom Wills