Fairness expected as supermarket watchdog moves to Defra

Oversight of supermarket watchdog, the Groceries Code Adjudicator (GCA), is transferring from the Department of Business and Trade to Defra from 1 July in a move the government says will improve fairness within the food supply chain.

The GCA regulates the relationship between the UK’s 14 largest grocery retailers and their direct suppliers by encouraging, monitoring and enforcing compliance with the Groceries Supply Code of Practice.

See also: Batters’ Farm Profitability Review finally published

This covers things such as late payments and unscheduled agreement changes, with the adjudicator empowered to arbitrate in disputes and even impose fines on retailers for non-compliance.

Bringing the GCA and the code under the Defra umbrella was one of the 57 recommendations contained in last year’s Farming Profitability Review from Baroness Minette Batters.

It was hoped the move would strengthen links to the Agricultural Supply Chain Adjudicator  – whose role is to ensure “fair dealings” in the dairy and pig sectors – and in doing so ensure both bodies are “adequately resourced to carry out their functions”.

Joined-up approach 

Defra farming minister Dame Angela Eagle said: “Moving responsibility for the Groceries Code Adjudicator to Defra will support a more joined-up approach to fairness across the food supply chain, while fully protecting its independence and statutory role.”

However, the Defra statement makes clear there will be no extension of the GCA’s statutory role or enforcement powers.

The Batters Review had recommended widening the GCA’s remit to the “out of home” food sector, and extending its cover from retailers to “intermediaries” (in other words, processors and food manufacturers).

Baroness Batters had also sought to reduce the size threshold for buyers of food purchases from £1bn to £500m, and to give farmers and growers more power to secure price rises when their costs of production are subject to sudden increases.

Reaction

Tenant Farmers Association chief executive George Dunn welcomed the transfer of responsibility for the GCA to Defra as a “significant step forward” in achieving better supply chain regulation.

“Bringing the GCA under the same umbrella as the Agricultural Supply Chain Adjudicator will make it so much easier for Defra to take a farm-to-fork approach to ensuring fairness within supply chains,” he said.

“Farmers and growers are all too regularly left facing incredibly challenging circumstances in the way that they are treated by processors and retailers, and it is vital that Defra now seizes the opportunity to level that playing field to ensure fairness for all.”