Minister dismisses retailers' argument over ombudsman plans

A GOVERNMENT Minister has dismissed the argument put forward by leading retailers that a grocery market ombudsman would result in increased food prices for consumers.

Speaking in a debate in Westminster Hall yesterday (Wednesday, October 14), international development Minister Michael Foster said he did not accept an ombudsman was likely to result in a material increase in food prices.

The issue of cost and the potential impact on consumers has been held up repeatedly by retailers as a key reason behind their blocking of the Competition Commission’s (CC) proposal to establish the ombudsman.

While Mr Foster admitted an independent regulator would generate additional costs he said it ‘would not constitute a material increase in prices’.

Despite his comments, he said there were still many issues to consider before Ministers could make a final decision, saying there was still ‘insufficient’ evidence to back up the CC’s claims an ombudsman would inspire producers with more confidence to invest and innovate.

His comments came during a debate called by Liberal Democrat MP and chair of the Grocery Market Action Group, Andrew George  who said it was ‘very rare’ for a Government to reject the ‘clear recommendations’ of an independent competition authority and called on Ministers to accept the proposal.

Ministers at the Department for Business Innovation and Skills, the Department for International Development and Defra are currently considering the proposals and Mr Foster said they expect make a final decision ‘before the end of the year’.

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