Retailer code not good enough

FINANCIAL BUSINESS adviser Grant Thornton has warned that the forthcoming audit on the supermarkets‘ compliance with the code of practice would not “yield substantive results”.

Duncan Swift, head of the company‘s Food & Agribusiness Recovery Group, said that the Office of Fair Trading report would not be able to uncover the extent of the fear suppliers had of losing contracts.

“Too much remains unwritten [in the existing code]. Even though suppliers can ask for some of it in writing, most don‘t, as they are too afraid of being seen as potential trouble makers. What the government’s audit is unlikely to capture is the extent of this problem,” Mr Swift said.

Radical reform of the Supermarket Code of Practice and the introduction of a Supermarket Ombudsman are needed to ensure the long-term future of the UK’s food industry, according to Mr Swift.

He said the problem with the current code is that it does not stipulate the minimum required contract terms that should govern every supply from a food supplier to a major supermarket.

He argued that for a code to make a difference, it must stipulate agreed written contracts between suppliers and supermarkets for all orders.

Mr Swift further said that the code should be made compulsory for any supermarket with a market share above 5% and that the government should consider creating a Supermarket Ombudsman in the same way that there is a Banking Ombudsman.