Government rejects calls to toughen up supermarket adjudicator
THE Government has rejected calls from MPs to toughen up the proposed Groceries Code Adjudicator (GCA).
In a report in July, the Business, Innovation and Skills (BIS) Select Committee made a number of recommendations to give the proposed adjudicator more teeth.
But in its response the Government rejected calls for the adjudicator to have powers to use evidence from a wider range of sources, including representative bodies like the NFU, to decide whether to launch an investigation.
It argued that the adjudicator would already have access to ‘any publicly available reports’ of these bodies when deciding whether or not to carry out an investigation.
The Government was non-committal on the suggestion that evidence from whistleblowers could also be used to spark an investigation
It also rejected the recommendation that the adjudicator should have powers to levy financial penalties on retailers who breach the rule, as soon as it is established.
It acknowledged that the immediate introduction of financial penalties would ‘provide an additional and immediate incentive for retailers to comply with the Groceries Code’.
“However, the Government remains of the view that financial penalties should be kept as a reserve power,” it said.
It argued that the presence of the adjudicator itself, the threat of an investigation and possible naming and shaming will act as a ‘powerful deterrent’ and ensure high levels of compliance with the code by supermarkets.
The BIS committee’s advice, made following an extensive inquiry in the Government’s Draft GC Bill was matched by the Environment, Food and Rural Affairs Committee, after it conducted its own inquiry.
NFU President Peter Kendall said the Government’s rejection of the MPs’ recommendations, which reflected the views of the NFU and other trade organisations, was ‘inexplicable’.
He said: “The Government chose to publish a draft Bill for pre-legislative scrutiny, so that MPs would be able to give their considered judgement on what form the final Bill should take.
“Having done so, it has now chosen to ignore the most significant recommendations of those MPs, rendering the pre-legislative process an irrelevant diversion.”
He said it was ‘essential’ that evidence from trade bodies can be used to spark an investigation in order for the code to work effectively, while the role of whistleblowers can also be vital.
“These recommendations have not been accepted by BIS which is a real kick in the teeth,” he said.
However, Food and Drink Federation director of communications Terry Jones said the Government response was ‘in general a step forward for trade associations’
He said FDF was ‘somewhat disappointed that financial penalties will not be available from the outset but accept the view that other sanctions and penalties will be powerful enough’.