Opinion: Transform weak retailer watchdog into farmer’s champion

Farmers Weekly Business reporter Jez Fredenburgh outlines the changes needed to transform the Groceries Code Adjudicator from a toothless watchdog to a farmer’s champion with real bite. 

The supermarket watchdog was designed to fail – and farmers are losing out.

On the surface the adjudicator appears to have teeth.

See also: Our plan to get supermarket watchdog fighting for farmers 

It can fine and name and shame the UK’s 10 biggest supermarkets, launch investigations and make legally binding recommendations.

But things are not what they seem.

The adjudicator is legally prevented from looking for evidence and must wait for suppliers to come forward. Yet 58% of suppliers surveyed last summer said they were too scared to speak out, even though four in five had experienced problems. Fear keeps the evidence from the adjudicator and legislation keeps the adjudicator away from the evidence.

In theory the adjudicator has always had the power to fine. But the government’s two-year delay in agreeing a maximum has prevented this power being exercised. This will change in April – but will not apply to earlier code breaches. Tesco, the subject of the adjudicator’s only investigation to date, will escape fines, no matter what the outcome.

Even with ample evidence, the adjudicator is hampered by its meagre budget. This stands at £800,000 – far short of the £4m originally recommended.

But the kick in the teeth for the vast majority of farmers is that the groceries code and adjudicator do not cover indirect suppliers. This is despite pressure filtering down the supply chain.

Given these challenges, the incumbent adjudicator, Christine Tacon, is making the best of what she’s got.

At last week’s NFU conference, focused on volatility, farmers put it to a panel, including Tesco’s agricultural manager, that supermarkets were squeezing profits out of farm businesses. Agricultural products were like any other commodity and needed to be competitive, replied the panel. Farmers should focus on their cost base and develop efficient and well-managed businesses.

Fair enough. But breaches of the groceries code generally mean a supplier has been asked for money unexpectedly, fined unreasonably, paid less than agreed or paid late. When farmers and their processors don’t know when or how much they will be paid, it is a bit much to expect them to plan for the future, invest and deal with volatility.

This is no basis for a strong business, food system, or industry.

Farmers Weekly thinks something needs to change. We have gathered a team with a wealth of expertise in the UK food supply chain. They have proposed essential changes to the adjudicator and the groceries code.

The adjudicator must either be upgraded to ombudsman as originally recommended in 2008, or strengthened with these key changes:

Extend the groceries code and the adjudicator’s remit to cover indirect suppliers

• Allow the adjudicator to look for evidence
• Increase the adjudicator’s budget.

We call on the next government to commit to reviewing the adjudicator and code and commit to taking these changes forward.

Getting an adjudicator and groceries code was a 15-year battle fought by many. But farmers, producers and the whole supply chain need a body with the power to match that of the supermarkets. Politicians must listen less to the retailers and more to farmers. They must commit to creating a watchdog fit for purpose.

Jez Fredenburgh
Business reporter