The Competition Commission has unveiled its long-awaited proposals for a supermarket ombudsman.

The Commission’s consultation document sets out plans for a grocery watchdog to arbitrate disputes between retailers and suppliers.

It will also investigate complaints under the Groceries Supply Code of Practice (pdf), announced in February.

Appointed by the Office of Fair Trading, the ombudsman’s will also publich guidance and make recommendations to retailers on how to improve their compliance with the code of practice.

Peter Freeman, CC chairman, said it was vital problems in the way retailers’ dealt with suppliers were tackled.

“Whilst the strengthened Code of Practice is a major step in the right direction, we believe that the creation of an independent Ombudsman is necessary to restore confidence amongst suppliers.

“It is in everyone’s interests to have a system in place in which all parties can have faith.

Mr Freeman said the Commission was urging retailers to agree to the establishment of an ombudsman, despite many expressing reservations over such plans.

“Retailers with good relationships with their suppliers have nothing to fear from this and we think that the modest costs involved would be more than justified in tackling an issue that has clouded the industry for several years now,” he added.

NFU president Peter Kendall welcomed the proposals and praised the Commission for not being swayed by retailers’ “scaremongering” that an ombudsman would lead to increased prices for consumers.

“I am especially pleased to see that the ombudsman will retain his broad discretion to determine when he should initiate an investigation,” he said.

“An ombudsman acting as a proactive enforcer of a strengthened code of practice would give suppliers the confidence to invest and innovate and produce a greater range of quality products for consumers and is, therefore, clearly in consumers’ best interests.”

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