The farming industry has welcomed the Competition Commission recommendations for an ombudsman’s scheme to adjudicate disputes between supermarkets and their suppliers.

The decision follows a long-running inquiry into the power of the retailers and is part of a package of measures announced on Friday 15 February.

The new ombudsman will have the power to award compensation and will uphold a tougher supermarket code of practice that will ban the the retrospective changing of contracts with suppliers.

Nation Farmers Union of Scotland deputy chief executive James Withers said: “We have spent three years working on this issue and we’re delighted to see the Competition Commission now proposing the supermarket adjudicator we have been pressing for.

“Our campaign is not about protecting farmers or anyone else from tough competition.  This is about ensuring fair trade in the UK food supply chain and, ultimately, about protecting consumer interests.

“The totally unacceptable demands by some supermarkets for lump sum payments and the promotional costs being forced on to suppliers are all part of a destructive squeeze on suppliers.

“And it is a squeeze that is jeopardising the future supply of local, quality food at a time when consumers have never been more in demand of it.”

“It is time the major supermarkets reacted more positively to the idea of an independent policeman.  Given all the warm words and glossy literature we see from them about their corporate social responsibility.”

Tenant Farmers Association chief executive George Dunn said: “Over the years we have been become increasingly concerned about the dominant role played by supermarkets in the supply chain between farm and fork.

“While it can be argued that consumers have benefited in the short term through low prices for food on supermarket shelves, the long term position is more worrying.

“Many farmers have been forced out of business because they are unable to produce food to the high animal welfare and environmental standards required of them at the prices the supermarkets have been willing to pay.”

The Country Land and Business Association’s  president Henry Aubrey Fletcher said a regulator with the power to put an end to the bully boy tactics the supermarkets have been accused of employing was long overdue.

“It has been clear to us for some time that the Supermarket Code of Practice was totally ineffective – but, perhaps unsurprisingly, many small producers have been unwilling to go public with their complaints for fear of reprisals that could put their businesses in jeopardy,” said Mr Aubrey Fletcher.

“The dominance of the food supply chain by the big supermarkets and the continued abuse of their market position through the use of pricing mechanisms such as below-cost selling, pay to stay schemes and charging for shelf space have been an area of huge concern to us.

“I think this announcement will bring a collective sigh of relief from everybody involved in the food supply chain,” he said.

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