Supermarket ombudsman levy fund doubles to £2m

Farm leaders have welcomed plans to increase the funding available to the supermarket ombudsman to investigate bad or unfair practices among retailers and processors.

The levy available to Christine Tacon, the groceries code adjudicator, to fund investigations into retailers that may have breached the Groceries Supply Chain Code of Practice looks set to be doubled to £2m.

However, unspent levy must be returned and this increase in the amount of levy available allows the adjudicator to have a “float” to fund potential investigations into bad or unfair practices.

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The Farmers Union of Wales (FUW) has welcomed the proposal, but called for more powers to be handed to the GCA.

“This significant increase should aid the adjudicator in funding investigations and is a positive step forward in identifying unfair practices, improving transparency and fostering accountability in the supply chain,” said FUW senior policy officer Dr Hazel Wright.

However, while the FUW applauded the move to increase the levy collected, it warned that more work must be done to improve the position of farmers in the supply chain.

As it stands, the groceries code applies to supermarkets with a turnover of more than £1bn. And the FUW has repeatedly called for this threshold to be lowered to cover more retailers.

Dr Wright said the code still did not cover indirect suppliers to supermarkets or the voluntary dairy code. 

Furthermore, the adjudicator cannot launch any investigation into a retailer without information from suppliers.

The Tenant Farmers Association (TFA) has said the GCA must be given “more teeth” to regulate the marketplace within which farmers and growers are operating to ensure fairness within the supply chain.

The GCA has lifted the lid on one supplier, Tesco, and found it “seriously breached” the Groceries Code with widespread payment delays to suppliers worth millions of pounds.

But the TFA said Ms Tacon “now needs the powers and resources to go deeper and wider within the supply chain”.

The GCA, which is funded by a levy on the large retailers, was introduced in June 2013 to ensure compliance with the Groceries Code, which itself became law in 2010.

The code is aimed at regulating the relationship between the 10 large grocery retailers and their direct suppliers.

Registration is now open for the 2016 GCA conference, which takes place in London on 27 June. The results of an anonymous YouGov survey of farmers who supply retailers will be presented at the conference.