13 March 2001
Supermarket code ‘watered down’
By FWi staff
A CODE to regulate relations between and suppliers and supermarkets looks set to offer farmers little protection, claim environmental campaigners
Recommendations by the Competition Commission have been watered down in a draft report of the code of practice, says Friends of the Earth.
Last autumn the competition watchdog said retailers/suppliers relations distort the market and recommended a legally binding code of practice.
FoE, which was leaked the draft report, says this will allow supermarkets to continue to dictate terms to suppliers and could drive farmers out of business.
The green group is calling on Prime Minister Tony Blair to scrap this and come up with something with real teeth including independent arbitration.
This weasel-worded Code of Practice will not release farmers from the power of supermarkets, said FoE food campaigner Adrian Bebb.
It will simply give legitimacy to big retailers to carry on with business as usual. If this happens many small suppliers will have to go to the wall.
The commission recommended that retailers should not ask suppliers to contribute to retailers costs for visits or packaging or fund promotions.
Nor should retailers seek compensation where profits are less than expected or sales are lower than forecast.
But in the draft report FoE says terms such as unreasonable, due care, or good faith leaves interpretation the hands of the supermarkets.
According to this code, arbitration in a dispute supermarkets and suppliers would be left to a mediator appointed by the stores, says the group.
On balance, last years commission report cleared the supermarkets of excessive profiteering concluding they were “broadly competitive”.
Earlier this month Tony Blair said that the supermarkets had farmers in an arm-lock