Written evidence submitted by the Grocery
Market Action Group
I am writing on behalf of the Grocery Market Action
Group (GMAG) of which I am the Chair.
The GMAG has been campaigning for the creation of
a Supermarket Adjudicator for nearly six years. In that time it
has contributed to the report of the Competition Commission's
Grocery Market Inquiry as well as other consultations and reports.
The GMAG has as members key stakeholder organisations including
the National Farmers Union, National Farmers Union Scotland, the
British Independent Fruit Growers Association, Friends of the
Earth, the British Brands Group, ActionAid, War on Want, Traidcraft,
the Association of Convenience Stores and others.
Whilst some member organisations of the GMAG will
submit their own responses to the Government's draft Grocery Code
Adjudicator Bill this document is an agreed summary submission
on behalf of the GMAG as a whole.
In brief we have the following key points which we
wish to emphasise in respect of the draft bill:
1. ENACT IN
THIS PARLIAMENTARY
SESSION
The origins of this Bill go back to the original
Competition Commission Inquiry in 1999 which proposed a voluntary
supermarket Code of Practice which has been ineffective in remedying
the failure of the market to drive out unfair dealing. As this
Act has broad cross party support, and because every day that
it is delayed more producers/suppliers are either pushed into
financial crisis or go out of business, the Bill must not be delayed
further.
2. REFLECT THE
COMPETITION COMMISSION'S
RECOMMENDATIONS
The Government's current draft Bill doesn't, as it
stands, reflect the recommendations made by the Competition Commission's
inquiry in 2008. We particularly highlight the important elements
that are missing from the draft Bill, such as credible evidence
and third party engagement, protecting anonymity, the power to
levy fines, measuring the efficacy of the Adjudicator and Adjudicator
staffing.
3. MAINTAINING
SUPPLIER ANONYMITY
AND PROTECTING
AGAINST RETALIATORY
ACTION
To protect suppliers from retaliatory action, victimisation
from supermarkets during and after an investigation, it should
be a duty of the Adjudicator to protect the anonymity of complainants
and those providing evidence.
The draft Bill refers to the Adjudicator being able
to act on "credible evidence". Such "credible evidence"
must also give the Adjudicator sufficient justification to be
proactive in carrying out investigations.
Third party organisations (such as the members of
GMAG) should be considered as possible sources of "credible
evidence". As drafted the Bill does not allow this. There
are three key reasons for ensuring the Bill recognises third party
sources as "credible".
1. Anonymity for complainants—Individual
suppliers/growers will need reassurance that anonymity is respected
when seeking to draw their concerns to the attention of the Adjudicator.
2. Protection from retaliation—It
would provide reassurance to individual complainants who justifiably
feat retaliatory action.
3. Adjudicator efficiency—Given
the limited resources of the Adjudicator, having third party NGOs
and trade associations assemble the body of initial evidence would
ease some of the pressure on the Adjudicator and allows it to
concentrate on carrying out effective investigations.
In addition it would be helpful to distinguish between:
(a) bilateral disputes between a single supplier
and one retailer, which, if not resolved by the two parties, could
be referred to the Adjudicator; and
(b) practices affecting a number of suppliers
and possibly carried out by more than one retailer.
The former will be rare. The latter is going to be
the Adjudicator's main workload, and for this he will be using
press reports, anonymous reports and confidential complaints.
Once there is enough "credible evidence" the Adjudicator
should be able to investigate.
4. POWER TO
LEVY FINES
The most effective deterrent will be the reputational
damage caused to the offending supermarkets by public "naming
and shaming". However, it is important that the Adjudicator
is able to levy fines as an essential part of the "naming
and shaming" process.
Fines can be used to redress the imbalance created
between the supermarket and those further down the supply chain
who have been negatively impacted upon by the supermarket's breach
of the GSCOP. This material punishment will also be important
in securing the effective negative publicity necessary for meaningful
"naming and shaming".
5. MEASURING
THE EFFICACY
OF THE
ADJUDICATOR
The opportunity of the annual report as contained
in the Bill could be expanded to become a more comprehensive
commentary on the sector and, in time, and annual scorecard which
those who maintain successful records of fair trading may choose
to refer to as part of a positive (rather than negative) source
of publicity/marketing to reassure their customers.
6. ADJUDICATOR
STAFFING TO
BE BROAD
BASED
A portion of the seconded staff should come from
Defra as well as from the OFT/Dbis. This will help to ensure that
the staff have knowledge/experience of the interests of growers
and suppliers.
I hope this is helpful. We would be pleased to offer
further comments and advice as required.
15 June 2011
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