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Press Release

Supermarket regulator is unnecessary quango

3 August 2010

The government should not be creating an 'adjudicator' - the new name for the ombudsman - to regulate relationships between supermarkets and their suppliers before the impact of the new Groceries Supply Code of Practice (GSCOP) has been assessed.

Reacting to the announcement, today (Tuesday), the British Retail Consortium said the new quango is unjustified and against the spirit of better regulation.

GSCOP was introduced as recently as February. Its impact needs to be felt and considered before any further intervention.

British Retail Consortium director general Stephen Robertson said, "An 'adjudicator' will just add unnecessary costs. We fail to see why principles of better regulation don't apply to grocery retailing, particularly when the additional costs will ultimately affect the prices customers pay.

"The existing code of practice was strengthened and extended as recently as February. It now applies to all the top ten biggest grocery retailers. It gives suppliers more protection and a new right to independent arbitration to resolve disputes. Its effectiveness over several years should be assessed before any decision to introduce further regulation.

"We already have the most regulated grocery sector in the world. The Code the 'adjudicator' would administer only applies to suppliers who have a contractual relationship with retailers but there's a real danger the new body will generate lots of correspondence from suppliers who aren't covered. Administering those will still clock up costs.

"Granting complainants anonymity offends against natural justice and would make it very difficult for retailers to respond to cases.

"With an independent budget and no direct reporting line to the Office of Fair Trading or government this is a quango. Quango's cost. This will reduce the efficiency of the supply chain and customers will pay the price.

"Let's not forget the key concern for the Competition Commission was consumers not suppliers. I don't see anything in this proposal that will help them."



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British Retail Consortium

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