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Press Release

Ombudsman would cost customers millions

13 January 2010

A supermarket ombudsman would hand negotiating power to multi-national food businesses and cost customers millions of pounds in higher prices, said the British Retail Consortium (BRC).

Reacting to the Government's plans, announced today (Wednesday), to consult on establishing a costly new bureaucracy to oversee relationships between supermarkets and their suppliers, the BRC said this would be the only example of an ombudsman set up to favour corporations over customers.

The BRC is challenging the claim that the only extra cost would be the £5 million the Government says retailers would be charged for setting up the new Quango.

British Retail Consortium Director General Stephen Robertson, said: "This would tip the balance of negotiating power in favour of multi-national food manufacturers allowing them to drive up the prices customers pay.

"This is not about farmers, very few deal directly with supermarkets, and it's not about a 'mere' £5 million pounds of extra costs.

"The UK grocery market is worth £130 billion a year. If threats of involving an ombudsman allow big food companies to squeeze even 0.1 per cent more out of supermarkets, that's £130 million extra on customers bills.

"It's disappointing that the Government has decided to pursue this despite the lack of evidence that it is needed. There is already a supplier code, overseen by the Office of Fair Trading (OFT) and offering the right to independent arbitration. It has long been compulsory for the 'big four' supermarkets and is being extended to more retailers next month.

"OFT Chief Executive John Fingleton has said supermarkets are pro-consumer, bringing lower prices, innovation and new services and an ombudsman is not necessary."



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British Retail Consortium

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