Dismay over OFT probe

FARM LEADERS and campaigners have lambasted the Office of Fair Trading after it concluded that “by and large” retailers are complying with the supermarket code of practice.

In a report published on Tues (Mar 22) the OFT said it had found little evidence that the code of practice was being breached, although it noted that the code was not being used to resolve disputes.

It said no code would be successful in dealing with allegations of breaches unless there was evidence of those alleged breaches.

Suppliers should therefore “overcome the fear of complaining” if they felt they had a grievance.

Sir John Vickers, OFT chairman, said: “There is extensive complaint about supermarket dealings with suppliers, and some – but not a lot of – evidence of past code breaches.

“This code, like any other, can work only if evidence comes forward. We are keen for further evidence to inform our continuing scrutiny of the supermarket sector.”

But the OFT‘s position has been attacked by supermarket critics.

Lib Dem shadow DEFRA secretary Andrew George said it was hardly surprising that suppliers were too fearful to come forward – supermarkets had them by the “short and curlies”.

“The code doesn‘t even give them anonymity, so they risk losing their livelihoods by complaining,” he said.

“The Department of Trade and Industry should appoint a Food Trade Inspector within the OFT to proactively investigate individual cases.

“If the supermarkets have nothing to hide then there is no reason for them to object.”

NFU Scotland president, John Kinnaird, said it was extremely disappointing that the OFT had highlighted supermarket suppliers‘ fear of complaining, yet it offered no solution.

“It is difficult to conclude that this audit has been anything other than a waste of time,” he said.

NFU president Tim Bennett said he welcomed the fact the OFT had signalled its support for the union‘s voluntary Buyers‘ Charter.

But he added: “Fair competition is something we encourage, but the climate of fear, which continues to exist under the code, needs to be addressed.”

An example of the kind of conditions suppliers are asked to work under was provided by Duncan Swift, head of Grant Thorton‘s food and agribusiness recovery group.

“A meat producer we are aware of can achieve sales of £2m per week but only has an indicative order book that does not stretch beyond the Friday of that same week,” he said.

“It clearly suits the supermarkets this producer supplies, to order the quantities it requires at the very last minute but it makes it incredibly hard for the producer to run the business properly.”

Government adviser Sir Donald Curry said it was clear there was an urgent need for government to get involved to help establish more trusting relationships between retailers and their suppliers.

“I plan to have discussions with key industry bodies to talk through the options,” he said.