Industry launches challenge to retailers

UK supermarkets have been challenged to sign up to plans to introduce an ombudsman to monitor relationships between suppliers and retailers.

Industry bodies and MPs have urged supermarkets to back proposals in a bid to make the supply chain fairer and more transparent.

 What do you think of the plans? Do you think it will have any effect on the way retailers deal with suppliers? Have your say on the FWi forums.

The challenge came after the Competition Commission launched a month-long consultation period to discuss plans for a grocery watchdog.

The Commission hopes all supermarkets will voluntarily sign up to the plans, which could be put in place by the end of 2009.

James Withers, NFU Scotland chief executive, said it was vital retailers backed the plans.

“We have four supermarkets that sell 80% of the food and drink in this country yet there is no independent check in the system.

“If you allow powerful players to operate without sufficient regulation, the world comes tumbling down on the ordinary consumer.”

Labour MP Andrew George, chairman of Grocery Market Action Group, backed the plans and said he had contacted all the UK’s major supermarket suppliers to urge them to commit to the ombudsman scheme.

Research had proved the creation of an ombudsman would lead to a more secure food sector which could lower prices for consumers, he added.

However the British Retail Consortium hit out at the plans, claiming a grocery watchdog was “expensive and unnecessary” and would ultimately hit consumers.

Andrew Opie, British Retail Consortium food director, said most supermarket suppliers were multi-national food businesses which were perfectly able to stand up for themselves against retailers.

“Retailers are right to defend customers’ interests by negotiating robustly with them,” he said.

“We have seen no evidence to support claims that retailers are unfairly putting the squeeze on their suppliers.

“There is already a supplier code, overseen by the Office of Fair Trading, which has long been compulsory for the ‘big four’ supermarkets. It is expected to be extended to more retailers.

“When Government ultimately considers the Commission’s recommendations it must see sense and bring this process to an end before customers are harmed.”

* For a Farmers Weekly comment on this story, see Phil Clarke’s Business Blog