'Adjudicator working and powers must be extended', NFU president says

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Powers of an independent adjudicator to oversee relationships between the UK’s major supermarkets and their suppliers have delivered a culture change in behaviour and now warrant wider scope, the leader of the National Farmers’ Union has claimed.

A government consultation is underway on whether the Groceries Code Adjudicator’s remit should cover smaller retailers and the food service and the proposal has been well received by a number of food and farming groups.

Christine Tacon, who previously ran the Co-operative Group’s farming business, was appointed as the country’s first ever supermarket ombudsman in 2013 and NFU president Meurig Raymond said she has had a positive impact since taking office.

The NFU has submitted evidence to the government review on the role of the GCA and a separate review into unfair trading practices.

Mr Raymond said: “The power of the GCA’s presence has enabled a change in retailer behaviour and therefore this way of working now needs to be replicated throughout the whole supply chain.

“It is also vital that the position remains independent. The power of intermediaries has increased in the years since the Competition Commissions investigation of 2008. Many businesses have increased their market power which they have been able to assert over suppliers and, to a lesser extent, retail customers as we have seen reported in the media over the past few months.”

The union boss added: “The increasing consolidation of suppliers and processors within the supply chain, in turn reducing competition and increasing buying power, leads to a power imbalance within the supply chain; that of the intermediaries versus farming businesses. This has led to unfair trading practices to be pushed onto producers.

“The NFU believes more retailers, food service and food manufacturers should fall under the scope of GSCOP (the Groceries Supply Code of Practice) to ensure the principles of fair trading are inherent across the whole supply chain.”

The UK’s ornamental sector, which is worth £2bn to the economy and accounts for flowers and plants supplied to supermarkets, should be brought under the GSCOP legislation, Mr Raymond said.

He also said the principles of the agri-sector voluntary codes of practice, such as the dairy and livestock voluntary codes, should be made compulsory and overseen by the GCA to give them more teeth.

Trade association Dairy UK has also responded to the GCA consultation in support of an extended remit but chief executive Dr Judith Bryans said she believed the adjudicator’s remit should not cover relations between dairy farmers and milk purchasers.

In its submission, Dairy UK states UK dairy markets are operating efficiently and do not operate outside European norms.

Dr Bryans said: “Giving the GCA any role in regulating contractual relationships could lead to the GCA becoming the focal point for price disputes throughout the industry. This would be unwarranted as there is no systemic failure in the UK market.”

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