A “climate of fear” is still stopping suppliers from raising issues with the supermarket watchdog, but industry insiders worry a lack of resources and government commitment is stopping this being overcome.
The government’s first review into the groceries code adjudicator (GCA) – published last week – acknowledged the issues suppliers faced, but concluded the GCA was effectively enforcing the groceries code, which retailers must legally abide by.
It recommended the government agree “a strategic goal” with the GCA to tackle the climate of fear.
Industry sources say the adjudicator’s office is undoubtedly making a difference, with a cultural shift under way in many of the large retailers.
Over the four years since the adjudicator was created, improvements have been made and the percentage of suppliers that say they are experiencing issues has dropped from 79% in 2014 to 56% in 2017.
However, those who work directly with suppliers facing difficulties say the scale of the problem requires more resources and powers.
More resource needed
“I don’t doubt there has been a bit of a sea change,” said Duncan Swift, head of the food advisory group at accountants Moore Stephens. “But it’s like saying the wind’s direction has changed in a gale.”
Following the review, the adjudicator is still not allowed to actively look for evidence, which could help overcome the issue with suppliers not coming forward, said Mr Swift.
Its powers to investigate and fine retailers are also limited because of the extra resource needed, he said.
The adjudicator herself is employed only three days a week, and the Tesco investigation last year took up most of the GCA’s budget, although the majority of the cost was eventually charged back to Tesco.
This means the GCA is “undoubtedly having to use soft power to influence”, said Mr Swift.
This is despite the government review acknowledging the investigation into Tesco has delivered a significant change in behaviour.
An industry source said relying on a collaborative approach with the retailers while also acting as arbitrator puts the GCA in a difficult position.
“It’s very difficult to rap [retailers] over the knuckles one moment if you’ve then got to shake their hand the next,” said the source.
However, Christine Tacon, the sitting adjudicator, has repeatedly said she believes a collaborative approach is more effective as it promotes better openness from retailers.
A spokesman for the adjudicator said resourcing is not an issue and the GCA can ask for additional funding if needed.
Since the Tesco investigation, the GCA has doubled the money it draws from retailers to £2m – with half of that set aside for further investigations. If an investigation finds a breach of the groceries code, the retailer will be asked to pay the cost.
However, Tom Maple, partner at solicitors Field Seymour Parkes, specialising in the groceries code, said even if the GCA draws down more funding for specific investigations, “who is going to do the work required?”
“While the GCA appears here to stay, the question must be asked, what realistically can it achieve with such a small workforce?”
But, Christine McDowell, food chain adviser at the NFU, said she does not think Ms Tacon will hold back from asking for more money if needed and that it is “very reasonable” to take a collaborative approach.
“She’s doing a good job – we should be shining a light on her.”