Grocery Market Ombudsman Bill

House of Commons

Session 2009 - 10
Internet Publications
Other Bills before Parliament

Grocery Market Ombudsman Bill

Grocery Market Ombudsman Bill
1

A
Bill
To
Make provision for the appointment, functions and powers of a Grocery
Market Ombudsman; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
1
Appointment of an independent Grocery Market Ombudsman by the Office
of Fair Trading
(1)
The Office of Fair Trading (“OFT”) must, within three months of this Act
coming into effect—
(a)
establish a body corporate to be known as the “Office of the Grocery
5
Market Ombudsman”, and
(b)
appoint a person as the Grocery Market Ombudsman (“the
Ombudsman”).
(2)
The Secretary of State must by regulations make provision regarding the
membership of the Office of the Grocery Market Ombudsman.
10
(3)
The purpose of the Ombudsman is to—
(a)
ensure fair dealing between retailers and their suppliers;
(b)
promote competition for the benefit of consumers;
(c)
enforce the Groceries Supply Code of Practice (“the Code”), including
the investigation and determination of complaints and disputes under
15
the Code; and
(d)
fulfil the purposes set out in the Recommendations from the
Competition Commission to the Minister of State for Business,
Innovation and Skills on 4 August 2009 (“the Recommendations”).
(4)
The Ombudsman is to be independent of the OFT.
20
(5)
The Ombudsman may appoint staff which the Ombudsman thinks are
necessary for the fulfilment of the Ombudsman’s functions.
(6)
The Ombudsman may delegate any of the Ombudsman’s powers and duties
under this Act to any member of staff.

Bill 18
54/5

Grocery Market Ombudsman Bill
2

(7)
Regulations under this section are subject to annulment in pursuance of a
resolution of either House of Parliament.
2
Duties to establish and publish procedures and guidelines
Within six months of being appointed to the role, the Ombudsman must—
(a)
establish and publish procedures for monitoring and enforcing the
5
Code;
(b)
establish and publish procedures regarding the investigation of
complaints of breaches of the Code;
(c)
establish and publish procedures regarding the investigation of
disputes under the Code; and
10
(d)
establish and publish guidelines as to how the Ombudsman will
promote fair dealing and competition in accordance with the
Recommendations.
3
Investigations and determinations by the Ombudsman
(1)
The Ombudsman may investigate and determine a complaint regarding
15
conduct allegedly in breach of the Code made by—
(a)
the OFT,
(b)
a supplier, as defined by the Groceries (Supply Chain Practices) Market
Investigation Order 2009, or
(c)
a retailer, as defined by the Groceries (Supply Chain Practices) Market
20
Investigation Order 2009.
(2)
The Ombudsman may investigate and determine a dispute regarding the Code
referred by—
(a)
the OFT,
(b)
a supplier, as defined by the Groceries (Supply Chain Practices) Market
25
Investigation Order 2009, or
(c)
a retailer, as defined by the Groceries (Supply Chain Practices) Market
Investigation Order 2009.
(3)
The Ombudsman must investigate and determine any complaint or dispute
which the Ombudsman thinks should be investigated, subject to subsection (8).
30
(4)
The Ombudsman must publish guidelines regarding how the Ombudsman
will decide which complaints and disputes will be investigated.
(5)
The Secretary of State may make rules by statutory instrument regarding the
procedures which are to be adopted in connection with—
(a)
the making of complaints and the reference of disputes, and
35
(b)
the investigation of complaints and disputes under this Act.
(6)
Subject to any provision made by the rules, the procedures for the making of
complaints, reference of disputes and the conduct of investigations shall be as
the Ombudsman considers appropriate in the circumstances.
(7)
The Ombudsman may investigate a complaint notwithstanding that it relates
40
to conduct which took place before these provisions came into force, as long as
the conduct occurred after the Groceries (Supply Chain Practices) Market
Investigation Order 2009 was made, on 4 August 2009.
(8)
The Ombudsman shall not investigate or determine a complaint or dispute if—

Grocery Market Ombudsman Bill
3

(a)
before the making of the complaint or the reference of the dispute,
proceedings in respect of the matters which would be the subject of the
investigation have been started in any court or tribunal, and
(b)
those proceedings have not been discontinued or have been
discontinued on the basis of a settlement or compromise binding all
5
persons by or on whose behalf the complaint or reference is made.
(9)
A determination by the Ombudsman may include—
(a)
upholding or rejecting a complaint or any part of a complaint;
(b)
deciding the accuracy of the positions of either or both parties to a
dispute under the Code;
10
(c)
directing a party complained of to—
(i)
refrain from any conduct, or
(ii)
take any action,

that the Ombudsman thinks is appropriate in the circumstances to
comply with the Code and remedy any breach;
15
(d)
ordering a party complained of to pay a monetary penalty in
accordance with section 6, or costs in accordance with section 7.
4
Ombudsman to provide written reasons for decisions
(1)
If the Ombudsman decides not to conduct an investigation pursuant to a
complaint made or a dispute raised, the Ombudsman will provide reasons for
20
that decision in writing to—
(a)
the complainant; and
(b)
the OFT.
(2)
Where the Ombudsman has conducted an investigation under this Act the
Ombudsman shall provide a written statement of the determination of the
25
complaint or dispute in question, including reasons for the determination, to—
(a)
all parties to the complaint or dispute; and
(b)
the OFT.
5
Power to gather information
(1)
For the purpose of conducting an investigation into a complaint or dispute, the
30
Ombudsman may—
(a)
obtain information from such persons and in such manner, and make
such inquiries, as the Ombudsman thinks fit;
(b)
require the production of any documents (including electronic
documents) as the Ombudsman thinks fit;
35
(c)
disclose information which is obtained for the purpose of an
investigation to any person prescribed in regulations under this
section, if the Ombudsman considers that the disclosure would enable
the person to discharge any of that person’s functions, or assist the
Ombudsman in discharging the Ombudsman’s functions.
40
(2)
Regulations under this section shall be made by statutory instrument and may
not be made unless a draft of the regulations has been laid before and approved
by resolution of both Houses of Parliament.

Grocery Market Ombudsman Bill
4

6
Power to impose monetary penalties
(1)
The Ombudsman may impose a monetary penalty on a party against which a
complaint, or part of a complaint, is upheld.
(2)
The Secretary of State may by regulations set out an appropriate range of
monetary penalties, and may by regulations set out an appropriate method of
5
determining the level of monetary penalty.
(3)
In determining the range of monetary penalties available, the Secretary of State
must consider the objectives of this Act and must consult with the OFT.
(4)
Regulations under this section are subject to annulment in pursuance of a
resolution of either House of Parliament.
10
(5)
Subject to any regulations under subsection (2), the Ombudsman will have full
discretion to impose the level of monetary penalty as the Ombudsman sees fit
in the circumstances of each case, taking into account the purposes of this Act.
7
Power to award costs
(1)
The Ombudsman may award costs against a retailer against whom a complaint
15
has been upheld.
(2)
In a case where the Ombudsman has found abuse of the Ombudsman’s
functions or the Formula according to section 13 of this Act, the Ombudsman
may award costs against a party found to have been directly or indirectly
responsible for the abuse.
20
8
Enforcement of monetary penalties and costs orders
(1)
The Secretary of State must by regulations provide for the enforcement of any
monetary penalties and costs orders imposed by the Ombudsman.
(2)
Regulations under this section shall be made by statutory instrument and may
not be made unless a draft of the regulations has been laid before and approved
25
by resolution of both Houses of Parliament.
9
Appeal
(1)
Subject to subsection (3), the determination by the Ombudsman of a complaint
or dispute shall be final and binding on all parties to the dispute.
(2)
In this section, “determination” includes any decision made, direction given or
30
penalty ordered by the Ombudsman.
(3)
An appeal from a determination of the Ombudsman on a point of law only
shall lie to the High Court or, in Scotland, the Court of Session or, in Northern
Ireland, the High Court.
10
Reporting requirement
35
(1)
The Ombudsman must publish the following reports—
(a)
reports on the results of all complaints investigated by the
Ombudsman, as soon as practicable after a determination is made in
respect of a complaint;

Grocery Market Ombudsman Bill
5

(b)
an annual report on the discharge of the Ombudsman’s functions for
each financial year, as soon as is practicable after the end of each
financial year; and
(c)
any other report that the Secretary of State requires by regulations
under this section.
5
(2)
For the purposes of the law of defamation, the publication of any report or
other matter by the Ombudsman under this Act shall be absolutely privileged.
(3)
Regulations under this section are subject to annulment in pursuance of a
resolution of either House of Parliament.
11
Funding of the Ombudsman
10
(1)
The OFT must directly fund all costs associated with the Ombudsman.
(2)
The OFT shall raise money from retailers to cover the costs to the OFT
associated with the Ombudsman in accordance with section 12.
12
The reimbursement formula
(1)
Within six months of the coming into force of this Act, the OFT shall publish a
15
reimbursement formula (“the Formula”) by which the OFT will raise the
money from retailers to cover the costs associated with the Ombudsman.
(2)
The aim of the Formula will be the calculation of each retailer’s contribution to
the costs of the Ombudsman by reference to the proportion of complaints made
and upheld against each retailer. For clarity, the principle of the Formula will
20
be that—
(a)
a retailer with more complaints made against it in any financial year
will contribute more to the costs associated with the Ombudsman in
that financial year than will a retailer with fewer complaints made
against it; and
25
(b)
a retailer with more complaints upheld against it in any financial year
will contribute more to the costs associated with the Ombudsman in
that financial year than will a retailer with fewer complaints upheld
against it.
(3)
The costs to be reimbursed by retailers may be calculated over more than one
30
year if the Ombudsman and the OFT agree to do so.
(4)
In developing the Formula, the OFT will—
(a)
follow the formula recommended in the Competition Commission’s
Report, unless there is good reason to vary it;
(b)
consult the Ombudsman.
35
(5)
For each period of reimbursement, the Ombudsman must make a
recommendation as to how much retailers should contribute according to the
formula for any particular period, and the OFT must follow that
recommendation unless there is good reason to vary it.
(6)
If the OFT considers there is good reason to depart from the Ombudsman’s
40
recommendation regarding retailer contribution it shall provide the
Ombudsman with reasons in writing.
(7)
The OFT may, from time to time, change the Formula if both the OFT and the
Ombudsman agree—

Grocery Market Ombudsman Bill
6

(a)
that it is necessary to better reflect the aim of the Competition
Commission’s recommendation; or
(b)
that the Formula has been or may be subject to abuse by any party,
including third parties.
(8)
Non-compliance by a retailer with the requirement to reimburse the OFT
5
according to the OFT’s calculations shall incur a monetary penalty, which will
be prescribed in regulations.
(9)
Regulations made under this section are subject to annulment in pursuance of
a resolution of either House of Parliament.
13
Abuse of the reimbursement formula or the Ombudsman’s investigatory
10
function
(1)
The Ombudsman will have the power to investigate any claims of abuse of the
Formula or of the Ombudsman’s investigatory function by any party.
(2)
In this section, “abuse of the Formula or the Ombudsman’s investigatory
function” includes but is not limited to complaints made against a retailer with
15
the purpose of increasing that retailer’s share of the costs under the Formula.
(3)
If the Ombudsman finds that the Formula or the Ombudsman’s investigatory
function has been subject to abuse by any party, any change to the Formula
may be retrospective for the purpose of remedying the effect of that abuse.
(4)
If the OFT finds that the Formula has been subject to abuse by any retailer,
20
directly or indirectly, that retailer may be subject to a monetary penalty, which
will be prescribed in regulations.
(5)
Regulations made under this section are subject to annulment in pursuance of
a resolution of either House of Parliament.
14
Financial provisions
25
(1)
There is to be paid out of money provided by Parliament—
(a)
any expenditure under this Act of a government department;
(b)
any increase attributable to this Act in the sums payable out of money so
provided under any other enactment.
(2)
There is to be paid into the Consolidated Fund any sums received by a government
30
department by virtue of this Act.
15
Interpretation
In this Act—
“Competition Commission’s Report” (“the Report”) means the report by
the Competition Commission on the Supply of Groceries in the UK,
35
dated 30 April 2008;
“Groceries Supply Code of Practice” (“the Code”) means the Groceries
Supply Code of Practice contained in the Groceries (Supply Chain
Practices) Market Investigation Order made by the Competition
Commission on 4 August 2009;
40
“OFT” means the Office of Fair Trading;

Grocery Market Ombudsman Bill
7

“Recommendations” means the recommendations from the Competition
Commission to the Minister of State for Business, Innovation and Skills
on 4 August 2009;
“retailers” means the companies listed in Schedule 2 to the Groceries
(Supply Chain Practices) Market Investigation Order made by the
5
Competition Commission on 4 August 2009;
“suppliers” means suppliers as defined in Schedule 1 of the Groceries
(Supply Chain Practices) Market Investigation Order 2009.
16
Short title and extent
(1)
This Act may be cited as the Grocery Market Ombudsman Act 2010.
10
(2)
This Act extends to England and Wales, Scotland and Northern Ireland.