Consultation to look at scrapping Groceries Code Adjudicator

The government is holding a consultation on how effective the Groceries Code Adjudicator (GCA) has been and whether it should be replaced.

The GCA was established in 2013 to monitor fair practice in the food supply chain between retailers and suppliers. Currently, 14 retailers are signed up to the groceries supply code of practice.

This will be the third statutory review of the GCA and covers the period between 1 April 2019 to 31 March 2022. The consultation is due to close on 11 October 2022.

See also: Groceries Code Adjudicator calls on suppliers to share views

The adjudicator is overseen by the Competitions and Markets Authority (CMA) and the government is interested in potentially transferring its functions to the CMA to improve efficiency.

Minister for small business, consumers and labour markets Jane Hunt launched the consultation and aims to establish how well the body has performed its statutory obligations.

Ms Hunt said: “The first review considered whether the GCA’s functions should be transferred to another public body or be abolished and found no evidence that transferring the GCA’s functions would increase the effectiveness of public functions or accountability to Ministers.

“In light of the need to ensure efficiency of public bodies, we would like to consider those questions again in the current review.

Industry reaction

NFU chief food business adviser Amy Fry said: “The Groceries Code Adjudicator is incredibly valuable to the food supply chain; holding retailers to account and allowing farmers and growers to highlight breaches of the Groceries Supply Code of Practice without fear of repercussion.

“The NFU is aware of the statutory review of the GCA and will be responding in due course.”

Dan Crossley, executive director of the Food Ethics Council, said: “Scrapping the Groceries Code Adjudicator role now would be a huge own-goal for the UK’s food retail sector.

“Over the years, power has become highly concentrated in the hands of a few big supermarkets, with attempted mergers and acquisitions by the likes of Amazon having the potential to give some companies even more market dominance.

“We need the Groceries Code Adjudicator to call out and address unfair trading practices, protect the supermarket’s suppliers from abuse and help retailers become fairer in their trading practices.

“With rampant inflation putting even more pressure on the already tumultuous retailer-supplier relationship, now would be the worst time to end the Groceries Code Adjudicator role.

“We should be doing the opposite and instead consider expanding its remit so it can make meaningful interventions that make food fairer for everyone.”

How to respond

Responses can be made through the government website or by email 

Postal responses should be sent to: GCA Review Team, Consumer and Competition, Department for Business, Energy and Industrial Strategy, 4th Floor, Victoria 2, 1 Victoria Street, London SW1H 0ET.

Annual survey

The GCA’s 2022 survey results from 2,500 responses were published in June and suggested the relationship between retailers and suppliers had weakened as a result of inflation.

The survey found that 80% of suppliers had asked for at least one cost price increase in the last year. More than a quarter of suppliers faced issues or refusals with a request for a cost price increase by a retailer.

According to the responses from direct suppliers, 18% had incurred significant costs due to inaccurate forecasting by retailers.

Asda was the supermarket which had the most issues raised, with 4% of its suppliers raising an issue with the retailer in the last year.

Mark White, the GCA, said: “Inflation has affected the entire groceries sector as witnessed by the sheer scale of requests from suppliers to increase prices.

“I am concerned that the pressure has impaired relationships and created wider problems.

“My priority is to work with all the retailers to ensure they treat their suppliers fairly as they navigate the cost price process during this difficult time.”